Advanced Search
MyIDEAS: Login

The Olympic effect

Contents:

Author Info

  • Andrew K. Rose
  • Mark M. Spiegel

Abstract

Economists are skeptical about the economic benefits of hosting "mega-events" such as the Olympic Games or the World Cup, since such activities have considerable cost and seem to yield few tangible benefits. These doubts are rarely shared by policymakers and the population, who are typically quite enthusiastic about such spectacles. In this paper, we reconcile these positions by examining the economic impact of hosting mega-events like the Olympics; we focus on trade. Using a variety of trade models, we show that hosting a mega-event like the Olympics has a positive impact on national exports. This effect is statistically robust, permanent, and large; trade is around 30% higher for countries that have hosted the Olympics. Interestingly however, we also find that unsuccessful bids to host the Olympics have a similar positive impact on exports. We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event. We develop a political economy model that formalizes this idea, and derives the conditions under which a signal like this is used by countries wishing to liberalize.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.frbsf.org/publications/economics/papers/2009/wp09-06bk.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2009-06.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:fip:fedfwp:2009-06

Contact details of provider:
Postal: P.O. Box 7702, San Francisco, CA 94120-7702
Phone: (415) 974-2000
Fax: (415) 974-3333
Email:
Web page: http://www.frbsf.org/
More information through EDIRC

Order Information:
Email:

Related research

Keywords: Trade ; Exports ; Economic development;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
  2. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  3. Jordan Rappaport & Chad Wilkerson, 2001. "What are the benefits of hosting a major league sports franchise?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 55-86.
  4. Sharun Mukand, 1999. "Globalization and the "Confidence Game"," Discussion Papers Series, Department of Economics, Tufts University 9924, Department of Economics, Tufts University.
  5. Bartolini, Leonardo & Drazen, Allan, 1997. "Capital-Account Liberalization as a Signal," American Economic Review, American Economic Association, vol. 87(1), pages 138-54, March.
  6. Robert Baade & Victor Matheson, 2000. "Bidding for the Olympics: Fools Gold?," IASE Conference Papers 0007, International Association of Sports Economists.
  7. Coates, Dennis & Humphreys, Brad R., 2003. "The effect of professional sports on earnings and employment in the services and retail sectors in US cities," Regional Science and Urban Economics, Elsevier, vol. 33(2), pages 175-198, March.
  8. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1988. "Industrialization and the Big Push," NBER Working Papers 2708, National Bureau of Economic Research, Inc.
  9. Carlino, Gerald & Coulson, N. Edward, 2004. "Compensating differentials and the social benefits of the NFL," Journal of Urban Economics, Elsevier, vol. 56(1), pages 25-50, July.
  10. Dennis Coates, 2007. "Stadiums And Arenas: Economic Development Or Economic Redistribution?," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 565-577, October.
  11. Banerjee, Abhijit V, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 797-817, August.
  12. Head, Keith & Mayer, Thierry & Ries, John, 2008. "The Erosion of Colonial Trade Linkages After Independence," CEPR Discussion Papers 6951, C.E.P.R. Discussion Papers.
  13. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2008. "Identifying Agglomeration Spillovers: Evidence from Million Dollar Plants," Working Paper Series 36-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
  14. Coates, Dennis & Humphreys, Brad R. & Zimbalist, Andrew, 2006. "Compensating differentials and the social benefits of the NFL: A comment," Journal of Urban Economics, Elsevier, vol. 60(1), pages 124-131, July.
  15. Robert E. Lucas, Jr., 2007. "Trade and the Diffusion of the Industrial Revolution," NBER Working Papers 13286, National Bureau of Economic Research, Inc.
  16. WOLFGANG MAENNIG & STAN du PLESSIS, 2007. "World Cup 2010: South African Economic Perspectives And Policy Challenges Informed By The Experience Of Germany 2006," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 578-590, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Michiel de Nooij & Marcel van den Berg, 2013. "The bidding paradox: why economists, consultants and politicians disagree on the economic effects of mega sports events but might agree on their attractiveness," Working Papers 13-09, Utrecht School of Economics.
  2. Markus Bruckner & Evi Pappa, 2011. "For an Olive Wreath? Olympic Games and Anticipation Effects in Macroeconomics," School of Economics Working Papers 2011-18, University of Adelaide, School of Economics.
  3. Tiziana Cuccia & Calogero Guccio & Ilde Rizzo, 2013. "Does Unesco inscription affect the performance of tourism destinations? A regional perspective," ACEI Working Paper Series AWP-04-2013, the Association for Cultural Economics International, revised Oct 2013.
  4. Michiel de Nooij & Marcel van den Berg, 2013. "The bidding paradox: why rational politicians still want to bid for mega sports events," Working Papers 13-08, Utrecht School of Economics.
  5. Robert Baumann & Bryan Engelhardt & Victor A. Matheson, 2012. "Employment Effects of the 2002 Winter Olympics in Salt Lake City, Utah," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 232(3), pages 308-317, May.
  6. Dewatripont, Mathias & Seabright, Paul, 2010. "Rational Crowd-Pleasing and Democratic Accountability," CEPR Discussion Papers 7660, C.E.P.R. Discussion Papers.
  7. Lin, Faqin, 2013. "Are distance effects really a puzzle?," Economic Modelling, Elsevier, vol. 31(C), pages 684-689.
  8. Asier Minondo & Francisco Requena-Silvente, 2011. "Estimating the gravity equation with the actual number of exporting firms," Working Papers 1121, Department of Applied Economics II, Universidad de Valencia.
  9. Mathieu Couttenier & Sophie Hatte, 2013. "Mass media effects on the production of information: Evidence from Non-Governmental Organization (NGO) Reports," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 13.01, Université de Lausanne, Faculté des HEC, DEEP.
  10. Esther Kalkbrenner, 2010. "Acquired versus Non-Acquired Subsidiaries - Which Entry Mode do Parent Firms Prefer," NRN working papers 2010-22, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fip:fedfwp:2009-06. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Diane Rosenberger).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.