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This study examines whether mutual funds herd in industries and the extent to which such herding impacts industry valuations. Using two herding measures proposed by Lakonishok et al. (1992) and Sias (2004) we document that mutual funds herd in industries. We show that industry herding is not...
We develop a theoretical model of managerial myopia based on the Q theory of investment. In this model, the manager chooses both investment quantity and the investment horizon. The manager may be myopic, causing an excess weight to be placed by the manager on short term profits, relative to...