Abstract
Using the herding measures of Lakonishok, Shleifer and Vishny (1992) (LSV) and Frey, Herbst and Walter (2007) (FHW), we assess herding by French equity mutual funds between 1999 and 2005. We show that LSV herding amounts to 6.5% while FHW herding is about 2.5 times stronger. We observe that herding is stronger in small than in medium and large capitalization firms. Herding is also more severe among foreign than among UE-15 or French stocks. Moreover, French mutual funds are shown to partially use positive feedback strategies. Finally, we obtain that sell-herding have a destabilizing impact on stock prices.
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