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This study investigates the role of financial market uncertainty in institutional herding and its impact on stock … prices. We show that financial market uncertainty is a determinant of institutional herding. Fund managers tend to follow the … trades of other managers more frequently during high uncertainty periods than low uncertainty periods. We find that herding …
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We estimate the effects of peer benchmarking by institutional investors on asset prices. To identify trades purely due to peer benchmarking as separate from those based on fundamentals or private information, we exploit a natural experiment involving a change in a government-imposed...
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