The influence of the social networks of fund managers on the herding behavior of SIFs in China

This paper explores the influence of fund managers' social networks on the herding behavior of securities investment funds (SIFs) in China. Using recent data on Chinese SIFs, it adopts the CSAD model to measure herding behavior. Combining indicators such as social network centrality, constraint, and size, the authors construct a regression model to test the influence of fund managers' social networks on SIFs' herding behavior and conduct an empirical study. Heterogeneity is examined by degree of herding behavior, gender, diploma, and region. The results show that: (i) larger social network size of fund managers is associated with a lower degree of herding behavior, while network constraint has no significant effect; (ii) when the overall degree of herding is high, the effect of network size on herding is heterogeneous; (iii) the relationship between male fund managers' social networks and herding is more significant than for female managers (network size significant only for male managers; centrality, constraint and size are not significant for female managers); (iv) the social networks of managers with master’s degrees significantly affect herding behavior, while effects are not significant for those with Ph.D. degrees.

Liang Wang, Yuanfei Wang, Bixiao Li