A Research On The Institution Investors' Herd Behavior Of Our Country And Its Impact On Our Market

Herd behavior is an irrational behavior. It is made in a market of asymmetric information, in which an investor is influenced by other investors and makes decision without analyzing. Herd behavior is always considered as the main cause of the fluctuation of the market. Established in 1994, security market in our country has not been complete, especially in the establishment of related system. Under this condition, investors in our market tend to imitate each other and follow others. They often buy the stocks when the the market raise and sell fall. Because of this kind of herd behavior, our market is often fluctuate heavily and can not reflect the real value of the stock, which has a negative impact on the development of our security market.This paper first analyses the concept, type and cause of the herd behavior qualifiedly to make the reader a general idea of the herd behavior. Secondly, the paper measures the behavior of investment fund with LSV model to analyses the degree of the herd behavior in our market quantitatively. Finally, the paper gives some suggestions on the improvement of the herd behavior in our security market to make our market have a steady and health development.