Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)

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Discussion on Factors Potentially Triggering Herding Behavior among Chinese Investors: A Case Study of the Ground Weaponry II Sector in the A-Share Market

Authors
Haoran Chen1, *
1Schulich School of Engineering, University of Calgary, Calgary, T2N 1N4, Canada
*Corresponding author. Email: airtiny98@gmail.com
Corresponding Author
Haoran Chen
Available Online 29 April 2026.
DOI
10.2991/978-94-6239-642-5_16How to use a DOI?
Keywords
Herding Behaviour; Chinese A-share Stock Market; Ground Weaponry II Sector (650300)
Abstract

Unlike theoretical research, empirical studies on herding behavior and its triggers in various contexts are relatively rare. This study aims to fill this gap by investigating the irrational herding effect and its contributing factors within the Ground Weaponry II sector (sector code: GWII) of China’s A-share market in 2025. In June, this sector showed significant volatility, partly due to major policy announcements and increased speculative trading. Its share price rose from 2,951.33 yuan on June 3 to 5,735.31 yuan by August 13, representing a rapid increase. This study applied the Cross-Sectional Absolute Deviation (CSAD) model and the Cross-Sectional Standard Deviation (CSSD) model, to examine herding behavior in China’s Ground Weaponry II sector from June 2025. Data on daily stock prices were sourced from the Tongdaxin database and analyzed using Python 3.10 (sklearn library). A nonlinear regression was conducted (a=0.05). Results indicate the emergence of significant herding, likely triggered by government-led restructuring of military enterprises. Individual investors over-interpreted the policy, becoming overly optimistic and engaging in mimicry-driven investment.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
Series
Advances in Economics, Business and Management Research
Publication Date
29 April 2026
ISBN
978-94-6239-642-5
ISSN
2352-5428
DOI
10.2991/978-94-6239-642-5_16How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Haoran Chen
PY  - 2026
DA  - 2026/04/29
TI  - Discussion on Factors Potentially Triggering Herding Behavior among Chinese Investors: A Case Study of the Ground Weaponry II Sector in the A-Share Market
BT  - Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
PB  - Atlantis Press
SP  - 145
EP  - 154
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-642-5_16
DO  - 10.2991/978-94-6239-642-5_16
ID  - Chen2026
ER  -