It hurts (stock prices) when your team is about to lose a soccer match
AbstractThe end result of major sporting events has been shown to affect next-day stock returns through shifts in investor mood. By studying the soccer matches that led to the elimination of France and Italy from the 2010 FIFA World Cup, we show that mood-related pricing effects can materialize as sporting events unfold. We do this by using intra-day stock prices for a firm cross-listed on the Paris and Milan stock exchange. This strategy allows for a straightforward identification of pricing effects. During the soccer matches, stock prices in the country that eventually loses are lower by up to seven basis points. The probability of underpricing increases as elimination from the tournament becomes more likely.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 412.
Date of creation: Jan 2014
Date of revision:
investor mood; cross-listed firms; stock market efficiency; high-frequency data; soccer;
Other versions of this item:
- Michael Ehrmann & David-Jan Jansen, 2014. "It Hurts (Stock Prices) When Your Team Is About to Lose a Soccer Match," Working Papers 14-2, Bank of Canada.
- G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-08 (All new papers)
- NEP-MST-2014-02-08 (Market Microstructure)
- NEP-SPO-2014-02-08 (Sports & Economics)
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