This study examines for the first time the true impact of domestic pension funds investing in equities on the stock market development from a comprehensive perspective. Specifically, we analyse the influence of three pension fund variables (the portions of domestic equity pension funds over...

Using the herding measures of Lakonishok, Shleifer and Vishny (1992) (LSV) and Frey, Herbst and Walter (2007) (FHW), we assess herding by French equity mutual funds between 1999 and 2005. We show that LSV herding amounts to 6.5% while FHW herding is about 2.5 times stronger. We observe that...