The NASCAR Phenomenon: Auto Racing Sponsorships and Shareholder Wealth
AbstractThis study presents the first analysis of the impact of NASCAR sponsorship announcements on the stock prices of sponsoring firms. The primary finding of the study that NASCAR sponsorship announcements were accompanied by the largest increases in shareholder wealth ever recorded in the marketing literature in response to a voluntary marketing program represents a striking and unambiguous stock market endorsement of the sponsorships. Indeed, the 24 sponsors analyzed in this study experienced mean increases in shareholder wealth of over $300 million dollars, net of all of the costs associated with the sponsorships. A multiple regression analysis of firm-specific stock price changes and select corporate and sponsorship attributes indicates that NASCAR sponsorships with more successful racing teams, corporate (as opposed to product or divisional) sponsorships, and sponsorships with direct ties to the consumer automotive industry are all positively correlated with perceived sponsorship success, while corporate cash flow per share (a well-known proxy for agency conflicts within the firm) is negatively related with shareholder approval.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Journal of Advertising Research.
Volume (Year): 44 (2004)
Issue (Month): 03 (September)
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- John Clark & T. Cornwell & Stephen Pruitt, 2009. "The impact of title event sponsorship announcements on shareholder wealth," Marketing Letters, Springer, vol. 20(2), pages 169-182, June.
- Kurt W. Rotthoff & Craig A. Depken, II & Peter A. Groothuis, 2011. "Influences on Sponsorship Deals in NASCAR: Indirect Evidence from Time on Camera," Working Papers 11-07, Department of Economics, Appalachian State University.
- Matthew Hood, 2012. "The Tiger Woods scandal: a cautionary tale for event studies," Managerial Finance, Emerald Group Publishing, vol. 38(3), pages 543-558, May.
- Haina Ding & Alexander Molchanov & Philip Stork, 2011. "The value of celebrity endorsements: A stock market perspective," Marketing Letters, Springer, vol. 22(2), pages 147-163, June.
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