Analysis on Herd Behavior in Chinese Venture Capital Market

2008 ◽  
Author(s):  
Yunhe Li ◽  
Zhilong Gan ◽  
Yi Yuan Mai
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Herd Behavior

scholarly journals Herd Behavior in Venture Capital Market: Evidence from China

Mathematics ◽  
2021 ◽  
Vol 9 (13) ◽  
pp. 1509
Author(s):  
Ruijun Zhang ◽  
Xiaotong Yang ◽  
Nian Li ◽  
Muhammad Asif Khan
Keyword(s):  
Venture Capital ◽  
Emerging Economies ◽  
Capital Market ◽  
Policy Implications ◽  
External Information ◽  
Herd Behavior ◽  
Venture Capitalists ◽  
Information Uncertainty ◽  
Essential Information ◽  
Steady Growth

This paper aims to empirically analyze the herd behavior in the VC market in the context of China, including the existence, causes and consequences of herding among venture capitalists. For our empirical analysis, we first construct a herding measure and confirm the existence of herd behavior in the Chinese VC market. Then, we perform OLS/logit regression to examine the causes and consequences of herding among venture capitalists. Our results suggest that herd behavior in the venture capital market are driven by positive signals of essential information and a higher degree of information uncertainty. However, we find no evidence of the influence of feedback trading signals on herding among venture capitalists. Further analysis suggests that a better external information environment would help weaken the herding among venture capitalists, while their reputation concerns might amplify the herding effect. Finally, we examine the economic consequence of the herding and find that the herd behavior of venture capitalists would have an adverse effect on their exit performance. In addition to the enrichment and development of herding theory, our study also provides an essential theoretical frame and policy implications for the steady growth of the venture capital market in emerging economies.

Determinants of Trading Decision: An Experiential Examination

GIS Business ◽  
2018 ◽  
Vol 13 (1) ◽  
pp. 1-9
Author(s):  
Gunjan Sharma ◽  
Tarika Singh ◽  
Suvijna Awasthi
Keyword(s):  
Stock Market ◽  
Capital Markets ◽  
Capital Market ◽  
Capital Mobility ◽  
Influential Factors ◽  
Herd Behavior ◽  
Human Beings ◽  
The Past ◽  
The Government ◽  
Indian Stock Market

In the midst of increasing globalization, the past two decades have observed huge inflow of outside capital in the shape of direct and portfolio investment. The increase in capital mobility is due to contact between the different economies across the globe. The growing liberalization in the capital market leads to the growth of various financial products and services. Over the past decade, the Indian capital market has witnessed numerous changes in the direction of developing the capital markets more robust. With the growing Indian economy, the larger inflow of funds has been fetched into the capital markets. The government is continuously working on investor’s education in order to increase retail participation in the Indian stock market. The habits of the risk-averse middle class have been changing where these investors started participating in the Indian stock market. It is an explored fact that human beings are irrational and considering this fact becomes imperative to investigate factors that influence the trading decisions. In this research, ‘an attempt has been made to investigate various factors that affect the individual trading decision’. The data has been collected from various stockbroking firms and from clients of those stockbroking firms their opinions were recorded by means of a questionnaire. Data collected through the structured questionnaire, 33 questions were prepared which was given to the 330 respondents on the basis of convenience sampling out of which 220 individuals filled questionnaire, the total of 200 questionnaires was included in the study after eliminating the incomplete questionnaire. Various factors are being explored from the literature and then with the help of factor analysis some of the most influential factors have been explored. Factors like overconfidence, optimism, cognitive bias, herd behavior, advisory effect, and idealism are the factors which influenced the trading decision of the investors the most. Such kind of a study is contributing in the area of behavioral finance as a trading decision is an important aspect while investing in the stock market. And this kind of study would be helping and assisting financial advisors to strategies for their clients in making the right allocation and also the policy maker and market regulators to come up with better reforms for the Indian stock markets.

scholarly journals Affect of Uncertainty Avoidance on Venture Capital Investing Activities in Asian Countries

2016 ◽  
Vol 12 (12) ◽  
pp. 152 ◽  
Author(s):  
Thi X. A. Tran ◽  
Thi L. A. Nguyen ◽  
Thi H. L. Nguyen
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Negative Impact ◽  
Uncertainty Avoidance ◽  
Asian Countries ◽  
Country Level ◽  
Significant Negative Impact

This research aims to use country–level uncertainty avoidance degree to explain the variation of venture capital investing activities across different Asian countries. The analysis of venture capital activity done for 11 Asian countries in period from 2003 to 2012 shows that country-level uncertainty avoidance degree have a significant negative impact on venture capital activity. Specifically, countries with higher degree of uncertainty avoidance degree, has a less developed venture capital market (a smaller-sized market with smaller venture capital deals).

The Role of Trust in the Informal Investor's Investment Decision: An Exploratory Analysis

1997 ◽  
Vol 21 (4) ◽  
pp. 63-81 ◽  
Author(s):  
Richard T. Harrison ◽  
Mark R. Dibben ◽  
Colin M. Mason
Keyword(s):  
Venture Capital ◽  
Empirical Research ◽  
Capital Market ◽  
Investment Decision ◽  
Theoretical Models ◽  
Policy Implications ◽  
Investment Opportunity ◽  
Informal Investment ◽  
Informal Venture Capital

Research into the informal venture capital market is characterized by a focus on empirical research into the characteristics of the market and on the development and analysis of the public policy Implications of this empirical research. There has, however, been little systematic application or development of theoretical models and frameworks appropriate to the informal venture capital market. Nor, with a few recent exceptions, has the empirical analysis of the market moved on to examine issues surrounding the process of Informal investment rather than the outcomes of that process. In this paper we seek to rectify both of these deficiencies. First, we develop a framework for the elucidation of the concepts of swift trust and swift cooperation, and in so doing formalize and expand on the generally passing references to trust in the entrepreneurship and venture capital literatures. Second, we derive from this an operationable framework for analyzing trust and cooperation, which we apply to the informal Investment decision-making process. Using verbal protocol analysis of Investor reactions In real time to one particular investment opportunity, we empirically examine the role of trust and cooperation in the investors’ Initial screening of potential investment opportunities, and the investors’ assessment of the intermediary responsible for providing the initial referral of the Investment opportunity.

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