Gebka, B., Jin, H. orcid.org/0000-0003-3752-0440, Kallinterakis, V. et al. (2 more authors) (2026) Herding and informed trading: Evidence from Chinese equity markets. Journal of Economic Behavior and Organization, 241. 107406. ISSN: 0167-2681
Abstract
We empirically investigate the relationship between informed trading and market herding in China for the 2003–2022 period and find a negative contemporaneous relationship, which grows stronger for specific market/economic conditions. Herding comprises of a very strong noise-driven herding and a fundamentals-driven anti-herding; informed trading dampens the former, while boosting the latter. Our results hold when controlling for the 2012 anti-insider trading laws and days of price-limit hits. Evidence on the dynamic relationship between informed trading and herding demonstrates that informed trading Granger-causes herding. Overall, informed traders motivate stronger herding over time, dampening it contemporaneously, thus suggesting that they prey on the very herding they attract.
Metadata
| Item Type: | Article |
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| Authors/Creators: |
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| Copyright, Publisher and Additional Information: | This is an author produced version of an article published in Journal of Economic Behavior & Organization, made available via the University of Leeds Research Outputs Policy under the terms of the Creative Commons Attribution License (CC-BY), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
| Keywords: | Informed trading; Herding; Anti-herding; Noise; Market states |
| Dates: |
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| Institution: | The University of Leeds |
| Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Faculty Office (LUBS) (Leeds) |
| Date Deposited: | 30 Jan 2026 16:38 |
| Last Modified: | 30 Jan 2026 16:38 |
| Status: | Published |
| Publisher: | Elsevier |
| Refereed: | Yes |
| Identification Number: | 10.1016/j.jebo.2025.107406 |
| Related URLs: | |
| Sustainable Development Goals: | |
| Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:237197 |
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