Are herding transmissions in the gulf cooperation council stock markets regional or international?

What is it about?

This paper investigates regional and global herding transmission patterns in the Gulf Cooperation Council equity markets. Our results show significant herding behavior that persists across various independent periods. This evidence stands even when we control for the well- known factor structures in stock returns. Importantly, we find that the few herding crossovers that occurred during the sample period are more likely to originate from the Saudi market rather than from the US. Therefore, we conclude that behavioral inefficiencies in the GCC equity markets are likely to be regional and that the sentiment-based trading in the US has essentially a minimal role to play.

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