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Numerological Superstitions and Market-Wide Herding: Evidence from China

Lookup NU author(s): Professor Bartosz GebkaORCiD

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Abstract

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 non-superstitious stocks. The similarities in herding between superstitious and non-superstitious stocks suggest that numerological superstitions do not motivate significantly stronger herding in Chinese markets.

Publication metadata

Author(s): Cui Y, Gavriilidis K, Gebka B, Kallinterakis V

Publication type: Article

Publication status: Published

Journal: International Review of Financial Analysis

Year: 2024

Volume: 93

Print publication date: 01/05/2024

Online publication date: 12/03/2024

Acceptance date: 07/03/2024

Date deposited: 22/03/2024

ISSN (print): 1057-5219

ISSN (electronic): 1873-8079

Publisher: Elsevier BV

URL: https://doi.org/10.1016/j.irfa.2024.103199

DOI: 10.1016/j.irfa.2024.103199

Data Access Statement: No

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