The Economic Impact of Olympic Games: Evidence from Stock Markets
AbstractBy means of an event study of stock market reactions to the announcement of the Olympic Games host cities, we find a significant and positive announcement effect of hosting the Summer Games, with a cumulative abnormal return of about 2% within a few days. We do not find any significant results for the Winter Games. Neither do we detect a significant impact when bidders lose the competition. Our results differ from those of a similar study by Mirman and Sharma (2008), who find that the Winter Games are subject to a significantly negative announcement impact, while the Summer Games are not. Our results, however, rely on a larger sample of 15 Olympic events and are obtained by assessing the abnormal returns after the announcement against a ?business?as?usual" situation (instead of testing the difference between winner group and loser group). Our findings are in line with economic intuition, since the Summer Games represent a larger event and are thus more likely to have a significant impact. We also find that among the winners, small economies tend to have greater cumulative abnormal returns than their large peers. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-060.
Date of creation: 2008
Date of revision:
Olympic Games; economic impact; event study; stock markets;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-21 (All new papers)
- NEP-SPO-2008-10-21 (Sports & Economics)
- NEP-TUR-2008-10-21 (Tourism Economics)
- NEP-URE-2008-10-21 (Urban & Real Estate Economics)
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