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The Impact of Hosting a Major Sport Event on the South African Economy

Author

Listed:
  • H. R. Bohlmann

    (Department of Economics, University of Pretoria)

  • Moses J.H. van Heerden

    (Department of Economics, University of Pretoria)

Abstract

The impact of the sporting industry on economic decision making has increased dramatically since the global media explosion in the 1980s. Tourism and advertising revenues generated by these mega-events have become a major boost to the economies of hosting nations. In addition, globalisation has placed great emphasis on the importance of foreign direct investment (FDI), especially to developing countries. This paper seeks to examine the impact of the pre-event phase expenditure attributed to the hosting of the 2010 FIFA World Cup on the South African economy. In this phase, expenditure is mainly geared towards the construction and improvement of infrastructure required to successfully host the event. Using a Computable General Equilibrium (CGE) model developed specifically for the South African economy, the impact of the pre-event phase on the local economy is measured. It is found that there is a positive impact on most macroeconomic variables, including GDP and employment. With the potential economic benefits of the event and post-event phases of the World Cup also taken into account, it can be concluded with relative certainty that the impact of hosting a mega-event on the South African economy is beneficial towards achieving higher economic growth and development. In addition to analysing the impact of the 2010 FIFA World Cup, the outcomes are also used to briefly examine the feasibility of South Africa’s bid to host the 2011 IRB World Cup and the 2016 Olympic Games.

Suggested Citation

  • H. R. Bohlmann & Moses J.H. van Heerden, 2005. "The Impact of Hosting a Major Sport Event on the South African Economy," Working Papers 200509, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:200509
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    File URL: http://www.up.ac.za/media/shared/61/WP/wp-9.zp39542.pdf
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    References listed on IDEAS

    as
    1. Hone, Phillip, 2005. "Assessing the contribution of sport to the economy," Working Papers eco_2005_02, Deakin University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Roberto Gásquez & Vicente Royuela, 2014. "Is Football an Indicator of Development at the International Level?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 827-848, July.
    2. Plácido Rodríguez & Stefan Késenne & Jaume García (ed.), 2013. "The Econometrics of Sport," Books, Edward Elgar Publishing, number 14811.
    3. Dusan Borovcanin & Ivan Cuk & Miha Lesjak & Emil Juvan, 2020. "The Importance of Sport Event on Hotel Performance for Restarting Tourism After COVID-19," Societies, MDPI, vol. 10(4), pages 1-13, November.
    4. José Ba-os & Plácido Rodríguez, 2013. "Spain and the FIFA World Cup 2018/2022: a qualitative and quantitative analysis," Chapters, in: Plácido Rodríguez & Stefan Késenne & Jaume García (ed.), The Econometrics of Sport, chapter 12, pages 202-220, Edward Elgar Publishing.
    5. Massiani, Jérôme, 2018. "Assessing the economic impact of mega events using Computable General Equilibrium models: Promises and compromises," Economic Modelling, Elsevier, vol. 75(C), pages 1-9.
    6. 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.
    7. Li, ShiNa & Blake, Adam & Thomas, Rhodri, 2013. "Modelling the economic impact of sports events: The case of the Beijing Olympics," Economic Modelling, Elsevier, vol. 30(C), pages 235-244.
    8. Allan, Grant J. & Lecca, Patrizio & Swales, Kim, 2017. "The impacts of temporary but anticipated tourism spending: An application to the Glasgow 2014 Commonwealth Games," Tourism Management, Elsevier, vol. 59(C), pages 325-337.
    9. MASSIANI, Jérôme, 2022. "Computable General Equilibrium assessment of mega-events: Issues and possible solutions," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 920-942.
    10. Sartori, Martina, 2017. "CGE modeling for the economic assessment of mega-events: A tentative cookbook," Conference papers 332841, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Martina Sartori, 2017. "Hosting a Mega-Event: Is it Good or Bad for the Economy? General Equilibrium Models as a Litmus Paper Test," Working Papers 2017: 21, Department of Economics, University of Venice "Ca' Foscari".
    12. Stan du Plessis & Wolfgang Maennig, 2007. "World Cup 2010: South African Economic Perspectives and Perspectives Policy Challenges Informed by the Experience of Germany 2006," Working Papers 004, Chair for Economic Policy, University of Hamburg.

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    More about this item

    Keywords

    computable general equilibrium; mega-events; economic development;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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