Chapter 12

Investors’ Herding in Frontier Markets: Evidence From Mongolia

A. Erdenetsogt*
V. Kallinterakis***    ABJYA LLC Brokerage Company, Ulaanbaatar, Mongolia**    University of Liverpool, Management School, Liverpool, United Kingdom


This study investigates investor herding in the Mongolian Stock Exchange, one of the world’s rapidly growing frontier markets. We find that investors in Mongolia herded significantly during the Dec. 1999–May 2012 period, with their herding significance persisting irrespective of the market’s direction, the level and day-to-day change of the market’s volume, and the US market’s dynamics. Sorting market returns by their sizes, we find that herding is found to be significant during extreme positive and extreme ...

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