Abstract/Summary

We investigate if religiosity promotes herding among stock market investors. In a global sample of 21 markets over the period 2006–2018, increasing religiosity fosters herding only when the ab solute religiosity level is relatively high. At low levels, an increase in religiosity has the opposite effect, promoting anti-herding. Our finding that changes in religiosity, depending on its level (high versus low), exert opposing effects on herding helps to understand contradictory findings in prior literature. Religiosity further induces more herding when economic freedom is low and the state is either impotent or corrupt, and promotes anti-herding when institutional quality is high.