Regulatory mood-congruence and herding: evidence from cannabis stocks

Panagiotis Andrikopoulos, Bartosz Gebka, Vasileios Kallinterakis

    Research output: Contribution to journalArticlepeer-review

    11 Citations (Scopus)
    70 Downloads (Pure)


    Although social mood can motivate herding towards new industries, the extent to which regulators cater to social mood may affect that herding. We explore this issue in the context of the nascent cannabis industry by examining herding among the cannabis stocks listed in the US and Canada, where the regulatory treatment of cannabis varies in its congruence with the prevailing social mood on cannabis’ legalization. Canadian-listed cannabis stocks entail strong herding across all market states and sectors, alongside most capitalization-segments; conversely, herding among their US-listed counterparts is relatively limited, appearing on up-market/high-volume days, for the smallest capitalization segment, as well as for several cannabis-sectors. Herding is present (almost always absent) around cannabis’ legalization announcement-days in Canada (the US), while cross market herding between US- and Canadian-listed cannabis stocks is very weak. We attribute Canadian (US) cannabis stocks’ strong (weak) herding to cannabis’ more (less) mood-congruent regulatory treatment, which promotes (reduces) certainty and encourages investors to herd more (less) on them.
    Original languageEnglish
    Pages (from-to)842-864
    Number of pages23
    JournalJournal of Economic Behavior & Organization
    Early online date12 Nov 2020
    Publication statusPublished - 30 Apr 2021

    Bibliographical note

    NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Behavior & Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Behavior & Organization, 185, (2021) DOI: 10.1016/j.jebo.2020.10.019

    © 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


    • Cannabis industry
    • Herding
    • Mood
    • North America
    • Regulation

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Organizational Behavior and Human Resource Management


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