Abstract
The existing literature about the overreaction effect in Chinese stock markets is inconclusive and controversial. Therefore, the
purpose of this paper is to investigate the presence of overreaction effect in the Shanghai A stock market in the post-financial crisis
period. To examine the overreaction effect in the stocks listed at SSE 50 Index, Average Cumulative Abnormal Return methodology
of (Maheshwari and Dhankar, 2015; Tripathi and Agrawal, 2009) within a unified framework is applied from January 2009 to
December 2014. The results confirm the presence of high market volatility due to more individual investors than institutional
investors who lead to more irrational decisions making that confirms the presence of overreaction effect in the Chinese Stock market
SSE index. The authors caution readers from generalizing the findings of this study, as the focus is only on A stocks listed on the
Shanghai Stock Exchange. The study will benefit government, policymakers and regulators of the economy by studying how the
presence of more individual investors than institutional investors of China stock market leads to more irrational decisions giving rise
to volatility. The study of China market with these distinctive features provides a potential contribution for emerging markets
investors especially for results that contribute with effect of post-global financial crises news effect on Chinese investors.
Marriam Rao, Ambreen Khursheed, Dr. Muhammad Naeem. (2019) Stock Market Investor Overreaction Effect: A Pragmatic Study on Emerging Markets, Paradigms , Vol 13, Special Issue.
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