An Empirical Research On Herding Behavior Of Securities Investment Funds And It's Impact On The Volatility Of Stock Price In China

In recent years, the securities investment fund, as an independent institutional investor, has attracted more and more attention from both the supervise department and market investors. As an institutional investor, securities investment fund also has irrational side. Herd Behavior is one kind of its irrational acts. Currently, in most developed markets, the power of institutional investors has exceeded more than half of the market; therefore, on institutional investors trading in the market characteristics, including acts such as herding behavior, study the stability of the market is of important significance. Institutional investors flock to conduct tests to observe its impact on the stability of the market, as the market and institutional investor's measure of the degree of maturityIn view of the above mentioned knowledge and comprehension, this thesis is based on summarizing the previous studies of Herd Behavior. Then it uses the LSV and CCK model to empirically testify if China's securities investment fund has marked Herd Behavior. Afterwards, on the above foundation, the thesis empirically studies the influence of Herding Behavior on the volatility of stock price. The research shows that strong evidence of herding behavior for Chinese security investment fund is found. And herding of investment fund induces the violent fluctuation of stock prices on the whole and destabilizes stock prices. Through analyze the results it raises some countermeasures and suggestions.