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Local sports sentiment and returns of locally headquartered stocks: A firm-level analysis

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  • Chang, Shao-Chi
  • Chen, Sheng-Syan
  • Chou, Robin K.
  • Lin, Yueh-Hsiang
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    Abstract

    We undertake a firm-level analysis of the relation between National Football League (NFL) game outcomes and the return patterns of Nasdaq firms headquartered geographically near the NFL teams. We find that a team's loss leads to lower next-day returns for locally headquartered stocks and that this impact increases for a surprising loss or a critical game loss. The negative effects of game losses are stronger for stocks that are more vulnerable to shifts in sports sentiment. Our results suggest that the game outcomes of local sports teams influence investor sentiment, which significantly affects the returns of localized trading stocks.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Empirical Finance.

    Volume (Year): 19 (2012)
    Issue (Month): 3 ()
    Pages: 309-318

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    Handle: RePEc:eee:empfin:v:19:y:2012:i:3:p:309-318

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    Web page: http://www.elsevier.com/locate/jempfin

    Related research

    Keywords: Behavior finance; Sports sentiment; Localized trading;

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    Cited by:
    1. Fung, Ka Wai Terence & Demir, Ender & Lau, Marco Chi Keung & Chan, Kwok Ho, 2013. "An Examination of Sports Event Sentiment: Microeconomic Evidence from Borsa Istanbul," MPRA Paper 52874, University Library of Munich, Germany.

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