Numerological superstitions and market-wide herding: evidence from China

Cui, Y. ORCID: https://orcid.org/0000-0002-0106-0668, Gavriilidis, K., Gebka, B. and Kallinterakis, V. (2024) Numerological superstitions and market-wide herding: evidence from China. International Review of Financial Analysis, 93. 103199. ISSN 1873-8079 doi: 10.1016/j.irfa.2024.103199

Abstract/Summary

We empirically investigate the effect of traditional Chinese numerological superstitions over market-wide herding in the Shanghai and Shenzhen stock exchanges for the 2000-2020 period, based on a classification of stocks as lucky/unlucky contingent on the presence of digits deemed numerologically lucky/unlucky in their tickers. We find no compelling evidence that herding is more pronounced in those superstitious stocks, as compared to the rest of the stock market. Both superstitious stock-types herd exclusively on high-volatility days and exhibit some pronounced patterns in up vs down markets; these effects are not significantly different from the behaviour of non-superstitious stocks, however. Similarly, herding in both superstitious stock-types is largely noise-driven, but the same effect is observed for nonsuperstitious stocks. The similarities in herding between superstitious and non-superstitious stocks suggest that numerological superstitions do not motivate significantly stronger herding in Chinese markets.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/119010
Identification Number/DOI	10.1016/j.irfa.2024.103199
Refereed	Yes
Divisions	Henley Business School > Finance and Accounting
Publisher	Elsevier
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