The Effect of Corporate Governance Capacity on Herd Behavior

Esra Özkahveci; Fatih Konak; Sabiha Kılıç

Makale detayları

The Effect of Corporate Governance Capacity on Herd Behavior

Yazarlar:

Esra Özkahveci | Fatih Konak | Sabiha Kılıç

Yayıncı:

Ege University

Ana Başlıklar:

İşletme

Dergi:

Ege Akademik Bakış Dergisi Vol.24 Issue 4, pp.639-650

Belge Tipi:

Makale

Yayın Tarihi:

1/2024

Belge Dili:

İngilizce

Document ID (Org No.):

2001329901

pISSN:

1303-099X

Anahtar kelimeler:

Özet:

 Behavioral finance, which rejects the basic assumption of traditional finance and argues that individuals do not always act rationally and that psychological factors have an effect on investor behavior, reveals the effect of cognitive biases and emotional factors on the investor. Herd behavior, which is one of these emotional factors, is to imitate the behavior of others in its most general definition. In addition, herd behavior, which affects investor behavior and therefore financial markets, is a behavioral attitude that shows that investors act together. On the other hand, corporate governance, which is becoming increasingly important by businesses, is a system in which company activities are managed and controlled. Enterprises with the highest corporate governance rating score can be included in the Borsa Istanbul Corporate Governance Index. The main purpose of working within the framework of herd behavior and corporate governance is to reveal the possible effect of corporate governance rating on herd behavior from a different perspective. In this context, the Christie and Huang 1995 Model and the Chang, Cheng and Khorana 2000 Model are used in the research. In terms of herd behavior, no herding behavior was found in 16 other prominent indices in Borsa Istanbul according to the results of Christie and Huang CH Model, while herd behavior was detected in some indices according to the results of Chang, Cheng and Khorana CCK Model. In addition, no evidence was found in favor of herd formation according to both the CH Model and the CCK Model in companies included in the Corporate Governance Index within the scope of herd behavior and grouped as highlow corporate governance score within the framework of the determined criteria.

 Behavioral finance, which rejects the basic assumption of traditional finance and argues that individuals do not always act rationally and that psychological factors have an effect on investor behavior, reveals the effect of cognitive biases and emotional factors on the investor. Herd behavior, which is one of these emotional factors, is to imitate the behavior of others in its most general definition. In addition, herd behavior, which affects investor behavior and therefore financial markets, is a behavioral attitude that shows that investors act together. On the other hand, corporate governance, which is becoming increasingly important by businesses, is a system in which company activities are managed and controlled. Enterprises with the highest corporate governance rating score can be included in the Borsa Istanbul Corporate Governance Index. The main purpose of working within the framework of herd behavior and corporate governance is to reveal the possible effect of corporate governance rating on herd behavior from a different perspective. In this context, the Christie and Huang 1995 Model and the Chang, Cheng and Khorana 2000 Model are used in the research. In terms of herd behavior, no herding behavior was found in 16 other prominent indices in Borsa Istanbul according to the results of Christie and Huang CH Model, while herd behavior was detected in some indices according to the results of Chang, Cheng and Khorana CCK Model. In addition, no evidence was found in favor of herd formation according to both the CH Model and the CCK Model in companies included in the Corporate Governance Index within the scope of herd behavior and grouped as highlow corporate governance score within the framework of the determined criteria.

 Behavioral finance, which rejects the basic assumption of traditional finance and argues that individuals do not always act rationally and that psychological factors have an effect on investor behavior, reveals the effect of cognitive biases and emotional factors on the investor. Herd behavior, which is one of these emotional factors, is to imitate the behavior of others in its most general definition. In addition, herd behavior, which affects investor behavior and therefore financial markets, is a behavioral attitude that shows that investors act together. On the other hand, corporate governance, which is becoming increasingly important by businesses, is a system in which company activities are managed and controlled. Enterprises with the highest corporate governance rating score can be included in the Borsa Istanbul Corporate Governance Index. The main purpose of working within the framework of herd behavior and corporate governance is to reveal the possible effect of corporate governance rating on herd behavior from a different perspective. In this context, the Christie and Huang 1995 Model and the Chang, Cheng and Khorana 2000 Model are used in the research. In terms of herd behavior, no herding behavior was found in 16 other prominent indices in Borsa Istanbul according to the results of Christie and Huang CH Model, while herd behavior was detected in some indices according to the results of Chang, Cheng and Khorana CCK Model. In addition, no evidence was found in favor of herd formation according to both the CH Model and the CCK Model in companies included in the Corporate Governance Index within the scope of herd behavior and grouped as highlow corporate governance score within the framework of the determined criteria.

 Behavioral finance, which rejects the basic assumption of traditional finance and argues that individuals do not always act rationally and that psychological factors have an effect on investor behavior, reveals the effect of cognitive biases and emotional factors on the investor. Herd behavior, which is one of these emotional factors, is to imitate the behavior of others in its most general definition. In addition, herd behavior, which affects investor behavior and therefore financial markets, is a behavioral attitude that shows that investors act together. On the other hand, corporate governance, which is becoming increasingly important by businesses, is a system in which company activities are managed and controlled. Enterprises with the highest corporate governance rating score can be included in the Borsa Istanbul Corporate Governance Index. The main purpose of working within the framework of herd behavior and corporate governance is to reveal the possible effect of corporate governance rating on herd behavior from a different perspective. In this context, the Christie and Huang 1995 Model and the Chang, Cheng and Khorana 2000 Model are used in the research. In terms of herd behavior, no herding behavior was found in 16 other prominent indices in Borsa Istanbul according to the results of Christie and Huang CH Model, while herd behavior was detected in some indices according to the results of Chang, Cheng and Khorana CCK Model. In addition, no evidence was found in favor of herd formation according to both the CH Model and the CCK Model in companies included in the Corporate Governance Index within the scope of herd behavior and grouped as highlow corporate governance score within the framework of the determined criteria.

Makale detayları

The Effect of Corporate Governance Capacity on Herd Behavior

Yazarlar:

Esra Özkahveci | Fatih Konak | Sabiha Kılıç

Yayıncı:

Ege University

Ana Başlıklar:

İşletme

Dergi:

Ege Akademik Bakış Dergisi Vol.24 Issue 4, pp.639-650

Belge Tipi:

Makale

Yayın Tarihi:

1/2024

Belge Dili:

İngilizce

Document ID (Org No.):

2001329901

pISSN:

1303-099X

Behavioral Finance

Herd Behavior

Corporate Governance Rating

Borsa İstanbulBehavioral Finance

Herd Behavior

Corporate Governance Rating

Borsa İstanbul

Sayı

Makale detayları

Yazarlar: Esra Özkahveci | Fatih Konak | Sabiha Kılıç

Yayıncı: Ege University

Ana Başlıklar: İşletme

Dergi: Ege Akademik Bakış Dergisi Vol.24 Issue 4, pp.639-650

Belge Tipi: Makale

Yayın Tarihi: 1/2024

Belge Dili: İngilizce

Document ID (Org No.): 2001329901

pISSN: 1303-099X

Sayı

Yazarlar:

Esra Özkahveci | Fatih Konak | Sabiha Kılıç

Yayıncı:

Ege University

Ana Başlıklar:

İşletme

Dergi:

Ege Akademik Bakış Dergisi Vol.24 Issue 4, pp.639-650

Belge Tipi:

Makale

Yayın Tarihi:

1/2024

Belge Dili:

İngilizce

Document ID (Org No.):

2001329901

pISSN:

1303-099X