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The Sydney Olympic Games Announcement and Australian Stock Market Reaction

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Author Info
Berman, Gabrielle
Brooks, Robert
Davidson, Sinclair

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Abstract

On 23 September 1993 the International Olympic Committee announced that Sydney would host the 2000 Olympic Games. Given the keen competition between rival cities bidding for the Olympics it could be argued that the winning city anticipates economic benefits to accrue from hosting the games. To the extent that this is valid, some stock market reaction may be found to the Olympic announcement. Testing the hypothesis for Australia the following results are found. First no overall impact on the stock market is found. Second, only a limited number of industries' portfolios show a significant positive impact to the Olympic games announcement. Specifically the industry portfolios are: building materials, developers and contracts, engineering and miscellaneous services. This is consistent with the economic boost for the Olympics being in infrastructure and development and thus in the general building and construction sector. Third the results clearly demonstrate that for the industries where there was a significant positive stock market reaction to the Olympic Games announcement, that significant positive stock market reaction is confined to stocks based in the state which will host the games, New South Wales. Copyright 2000 by Taylor and Francis Group

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 7 (2000)
Issue (Month): 12 (December)
Pages: 781-84
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Handle: RePEc:taf:apeclt:v:7:y:2000:i:12:p:781-84

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