Herding in the Portuguese stock market

: influences of covid-19 and ESG

Abstract

This study observes the propensity of herding in the Portuguese stock market during stable market periods and under the influence of Covid-19, using CSSD and CSAD models. Furthermore, noting the increased attention to ESG and its influence on behavior, this study isolates the Portuguese stocks based on their ESG performance to check if ESG potentializes the herding behavior. Results showed significant evidence that Portuguese investors herded in the period of Covid-19, which presented higher market volatility. This phenomenon was stronger in stocks of firms with better ESG performance, suggesting the positive influence of ESG factors on behavior. Meanwhile, by not finding evidence of herding during stable market periods, this study suggests that ESG may not alone be sufficient to spark this phenomenon.

Date of Award	30 Oct 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Mário Ferreira (Supervisor)