The impact of foreign participation on stock prices in the United States

Abstract

Using a standard demand–supply model, this study investigates the relationship between foreign participation in the equity market and stock prices, incorporating the effects of inflation and the demographic structure. The results show that while foreign participation in the equity market and the proportion of population in their prime earning age have a positive impact, inflation has a negative impact on stock prices.

Keywords:

• foreign equity participation
• stock prices
• baby boomers

JEL Classification:

• E44
• G12