The Causes and Influences of Institutional Investors Herding Behavior in the Taiwan Stock Market

This study took the Taiwan stock market as samples to discuss the causes and influences of institutional investors herding behavior. The empirical period was from January 2007 to December 2017. The empirical results showed that: (1) The institutional investors generally had herding behavior; (2) The institutional investors had both intentional herding and spurious herding; (3) Herding behavior of the institutional investors presented a positive relationship with excess returns of the next period of individual stocks; (4) Market volatility would affect the herding behavior of the institutional investors; (5) The financial crisis would not affect the cause of herding behaviors of the institutional investors. But, However, it would cause changes in the influence of the institutional investors’ herd behavior on excess returns and market fluctuations. The above empirical results provided investors with new direction when selecting stocks.