Numerological Superstitions and Market-Wide Herding: Evidence from China  

Cui, Yueting; Gavriilidis, Konstantinos; Gebka, Bartosz; Kallinterakis, Vasileios

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.

Citation

Cui, Y., Gavriilidis, K., Gebka, B., & Kallinterakis, V. (2024). Numerological Superstitions and Market-Wide Herding: Evidence from China  . International Review of Financial Analysis, 93, Article 103199

• Journal Article Type: Article
• Acceptance Date: Mar 7, 2024
• Online Publication Date: Mar 18, 2024
• Publication Date: 2024-05
• Deposit Date: Mar 21, 2024
• Publicly Available Date: Mar 21, 2024
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 93
• Article Number: 103199
• Public URL: https://durham-repository.worktribe.com/output/2324554