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It Hurts (Stock Prices) When Your Team is about to Lose a Soccer Match

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  • Michael Ehrmann
  • David-Jan Jansen

Abstract

The end result of major sporting events has been shown to affect next day stock returns through shifts in investor mood. By studying intraday data during the soccer matches that led to the elimination of France and Italy from the 2010 FIFA World Cup, we test whether mood-related pricing effects already materialize as events unfold. We use data for a cross-listed firm, which allows for a straightforward identification of underpricing. During the matches, the firm’s stock is underpriced by up to 7 basis points in the country that eventually loses. The probability of underpricing increases as elimination becomes more likely.

Suggested Citation

  • Michael Ehrmann & David-Jan Jansen, 2016. "It Hurts (Stock Prices) When Your Team is about to Lose a Soccer Match," Review of Finance, European Finance Association, vol. 20(3), pages 1215-1233.
  • Handle: RePEc:oup:revfin:v:20:y:2016:i:3:p:1215-1233.
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    File URL: http://hdl.handle.net/10.1093/rof/rfv031
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    References listed on IDEAS

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    Cited by:

    1. Carlos Viana de Carvalho & Eduardo Zilberman & Ruy Ribeiro, "undated". "Sentiment, Electoral Uncertainty and Stock Returns," Textos para discussão 655, Department of Economics PUC-Rio (Brazil).

    More about this item

    JEL classification:

    • 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

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