Institutional industry herding

Nicole Choi, Richard W. Sias

Research output: Contribution to journalArticlepeer-review

234 Scopus citations


We examine whether institutional investors follow each other into and out of the same industries. Our empirical results reveal strong evidence of institutional industry herding. The cross-sectional correlation between the fraction of institutional traders buying an industry this quarter and the fraction buying last quarter, for example, averages 40%. Additional tests suggest that correlated signals primarily drive institutional industry herding. Our results also provide empirical support for "style investing" models.

Original languageEnglish (US)
Pages (from-to)469-491
Number of pages23
JournalJournal of Financial Economics
Issue number3
StatePublished - Dec 2009


  • Herding
  • Institutional investors
  • Style investing

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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