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Frequent News and Pure Signals: The Case of a Publicly Traded Football Club

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  • Georg Stadtmann

    ()
    (Department of Economics, WHU Koblenz
    Institute for Development Strategies, Indiana University)

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    Abstract

    We use stock market data for Borussia Dortmund GmbH & Co. KGaA – one of the leading German football clubs – for an application of the news model. Due to the specific characteristics of the news generating process, the case of a publicly traded sport club is a very appropriate candidate for testing this model. By applying a traditional as well as a reversed news model we elaborate whether new information can explain subsequent changes in the stock price of Borussia Dortmund. We find that sport as well as corporate governance related variables are important drivers of the stock price.

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    File Function: Paper presented at the Joint Annual Meeting 2006 of the International and German-Speaking Associations of Sports Economists (IASE and AK), May 4-6, 2006
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    Bibliographic Info

    Paper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 0603.

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    Length: 30 pages
    Date of creation: Jun 2006
    Date of revision:
    Handle: RePEc:spe:wpaper:0603

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    Web page: http://www.kennesaw.edu/naase
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    Related research

    Keywords: News Model; Football Industry; Betting Odds; Stock Market;

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    1. Forrest, David & Simmons, Robert & Feehan, Patrick, 2002. "A Spatial Cross-Sectional Analysis of the Elasticity of Demand for Soccer," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(3), pages 336-55, August.
    2. repec:ccp:journl:v:10:y:2003:i:12:p:783-785 is not listed on IDEAS
    3. Vergin, Roger C. & Sosik, John J., 1999. "No place like home: an examination of the home field advantage in gambling strategies in NFL football," Journal of Economics and Business, Elsevier, vol. 51(1), pages 21-31, January.
    4. Brown, Gregory W. & Hartzell, Jay C., 2001. "Market reaction to public information: The atypical case of the Boston Celtics," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 333-370, May.
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    7. Peel, David A & Thomas, Dennis A, 1988. "Outcome Uncertainty and the Demand for Football: An Analysis of Match Attendances in the English Football League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 35(3), pages 242-49, August.
    8. Palomino, F.A. & Renneboog, L.D.R. & Zhang, C., 2005. "Stock Price Reactions to Short-Lived Public Information: The Case of Betting Odds," Discussion Paper 2005-62, Tilburg University, Center for Economic Research.
    9. Dobson,Stephen & Goddard,John, 2011. "The Economics of Football," Cambridge Books, Cambridge University Press, number 9780521517140, October.
    10. Gärtner, Manfred & Pommerehne, Werner W., 1977. "Der Fußballzuschauer - Ein Homo Oeconomicus?," Discussion Papers, Series 1 102, University of Konstanz, Department of Economics.
    11. Baimbridge, Mark & Cameron, Samuel & Dawson, Peter, 1996. "Satellite Television and the Demand for Football: A Whole New Ball Game?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 43(3), pages 317-33, August.
    12. J. K. Ashton & B. Gerrard & R. Hudson, 2003. "Economic impact of national sporting success: evidence from the London stock exchange," Applied Economics Letters, Taylor & Francis Journals, vol. 10(12), pages 783-785.
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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.
    2. Croonenbroeck, Carsten & Monaco, Fabrizio Leonardo & Christensen, Mads Julius, 2012. "Does Danish football club Brøndby swim with the fishes? An application of the reversed news model," Discussion Papers 330, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    3. Dennis Coates & Brad R. Humphreys, 2008. "The Effect of On-Field Success on Stock Prices: Evidence from Nippon Professional Baseball," Working Papers 0805, International Association of Sports Economists & North American Association of Sports Economists.

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