Version 1
: Received: 30 April 2024 / Approved: 1 May 2024 / Online: 1 May 2024 (07:43:45 CEST)
How to cite:
Said, Y.; Khayal, Z. A. E.; Srour, H. M. The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study). Preprints2024, 2024050055. https://doi.org/10.20944/preprints202405.0055.v1
Said, Y.; Khayal, Z. A. E.; Srour, H. M. The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study). Preprints 2024, 2024050055. https://doi.org/10.20944/preprints202405.0055.v1
Said, Y.; Khayal, Z. A. E.; Srour, H. M. The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study). Preprints2024, 2024050055. https://doi.org/10.20944/preprints202405.0055.v1
APA Style
Said, Y., Khayal, Z. A. E., & Srour, H. M. (2024). The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study). Preprints. https://doi.org/10.20944/preprints202405.0055.v1
Chicago/Turabian Style
Said, Y., Zeinab Amin Elsayed Khayal and Heba Mohamed Srour. 2024 "The Egyptian Stock Market: Herding Behavior, ESG Indexes, and Market Capitalization (An Empirical Study)" Preprints. https://doi.org/10.20944/preprints202405.0055.v1
Abstract
The present paper examines the impact of herding behavior on market capitalization in the Egyptian stock market before and after the disclosure of environmental-social-governance scores (ESG Score Index). This line of thought and research contributes to the literature on the interrelationships between ESG factors and market dynamics. Consequently, the evolving landscape of how to sustain investments in emerging markets like Egypt can be enlightened. Two main hypotheses were tested in the paper. The first hypothesis is on the expected significant impact of herding behaviour on market capitalization. The second hypothesis is on the expected positive impact of ESG on the relationship between herding behaviour and market capitalization. Panel data analysis using data extracted from financial statements of 22 Egyptian EGX 30 companies, over the period 2018-2023 will be used. This is to control for the cross-section and time characteristics of the research sample. The empirical findings reveal a positive significant effect of herding behavior on market capitalization before disclosing ESG scores. Another finding is that after the implementation of mandatory ESG disclosure, the relationship between herding behavior and market capitalization is strengthened. Moreover, it is empirically evident that companies with higher ESG performance attract more investments and higher valuations. The importance of ESG in shaping investment decision-making, enhancing transparency, and market dynamics has important policy implications.
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
