AUTHOR=Cano Carlos , Jareño Francisco , Tolentino Marta 

TITLE=Investor Behavior and Flow-through Capability in the US Stock Market

JOURNAL=Frontiers in Psychology

VOLUME=Volume 7 - 2016

YEAR=2016

URL=https://www.frontiersin.org/journals/psychology/articles/10.3389/fpsyg.2016.00668

DOI=10.3389/fpsyg.2016.00668

ISSN=1664-1078

ABSTRACT=This paper analyzes investor behavior depending on the flow-through capability in the US stock market, because investors seek protection from inflation rate changes, and the flow-through capability (a firm’s ability to transmit inflation shocks to the prices of its products and services) is a key factor in investment decisions. Our estimates of the flow-through capability of firms listed on the US stock exchange at the sector level are significantly different among industries, and we demonstrate a direct relationship between changes in stock prices (at the sector level) and flow-through capability. These results would be relevant because they have important implications on investor behavior.