This article investigates the effect that COVID-19 shock has on investor herding
behavior in the South Korean financial market. With new variants appearing periodically,
uncertainty is bound to rise, causing investors to search for information from others. I
find that herding behavior increases for up to 50 days after the emergence of COVID-19.
Herding behavior is shown in the Korean financial market, and COVID-19 shock
increases herding, especially when the market is down for each variant. This is due to
increases in uncertainty and information asymmetry.
Keywords: COVID-19, Investor herding, South Korea, Shock persistency, Variants