Inflation absorption capability and its effect on the price of shares: A review of its literature
Capacidad de absorción de la inflación y su efecto sobre el precio de las acciones: una revisión de la literatura
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This article addresses the inflation absorption capability of companies classified by sectors, as well as its impact in the price of shares. It starts by justifying the importance of the subject of study and then it presents a review of the international literature on the subject. The pioneer works on the subject are highlighted and a classification of the studies that have been analyzed is provided. Then, it analyzes the Spanish case in order to complete the main conclusions of the study. According to the authors, the inflation absorption capability, allows us to know the capability that companies from a determined sector have to translate the inflationary changes that happen in the economy into prices. The companies with a high capability of absorption will tend to present higher quotations, and will be less sensitive to inflationary changes.
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