IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v24y2023i6p759-800.html
   My bibliography  Save this article

Stock Markets’ Reactions to the Announcement of the Hosts. An Event Study in the Analysis of Large Sporting Events in the Years 1976–2032

Author

Listed:
  • Krystian M. Zawadzki
  • Marcin Potrykus

Abstract

This study attempts to estimate the impact of the announcements of hosts of large sporting events on domestic stock markets. The research problem is to establish a connection between the uniqueness of a sporting event and investors’ beliefs through stock price behavior. Using appropriate estimation windows, 13 different sporting events classified as large, including mega and major events, were tested. The obtained results show that, in principle, one day after the announcement of the host of a large sporting event, an average positive reaction of 0.22% is observed on national stock exchanges. The analyzed events were also classified as being neutral for capital markets or generating positive or negative reactions when the host country is announced to the public.

Suggested Citation

  • Krystian M. Zawadzki & Marcin Potrykus, 2023. "Stock Markets’ Reactions to the Announcement of the Hosts. An Event Study in the Analysis of Large Sporting Events in the Years 1976–2032," Journal of Sports Economics, , vol. 24(6), pages 759-800, August.
    • Handle: RePEc:sae:jospec:v:24:y:2023:i:6:p:759-800
    DOI: 10.1177/15270025231156051
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/15270025231156051
    Download Restriction: no
    File URL: https://libkey.io/10.1177/15270025231156051?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stefan Szymanski, 2010. "The Economic Impact of the World Cup," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 11, pages 226-235, Palgrave Macmillan.
    2. Bana Abuzayed, 2013. "Sport and emerging capital markets: market reaction to the 2022 World Cup announcement," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 6(2), pages 122-141, June.
    3. John Clark & T. Cornwell & Stephen Pruitt, 2009. "The impact of title event sponsorship announcements on shareholder wealth," Marketing Letters, Springer, vol. 20(2), pages 169-182, June.
    4. Bert Scholtens & Wijtze Peenstra, 2009. "Scoring on the stock exchange? The effect of football matches on stock market returns: an event study," Applied Economics, Taylor & Francis Journals, vol. 41(25), pages 3231-3237.
    5. Frieder, Laura & Subrahmanyam, Avanidhar, 2005. "Brand Perceptions and the Market for Common Stock," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(1), pages 57-85, March.
    6. William F. Sharpe, 1963. "A Simplified Model for Portfolio Analysis," Management Science, INFORMS, vol. 9(2), pages 277-293, January.
    7. Robert Baade & Victor Matheson, 2004. "The Quest for the Cup: Assessing the Economic Impact of the World Cup," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 343-354.
    8. Arne Feddersen & Wolfgang Maennig, 2009. "Wage and Employment Effects of the Olympic Games in Atlanta 1996 Reconsidered," Working Papers 0916, International Association of Sports Economists;North American Association of Sports Economists.
    9. Patell, Jm, 1976. "Corporate Forecasts Of Earnings Per Share And Stock-Price Behavior - Empirical Tests," Journal of Accounting Research, Wiley Blackwell, vol. 14(2), pages 246-276.
    10. Krystian M. Zawadzki, 2016. "Public Perception of Intangible Benefits and Costs in the Valuation of Mega Sports Events: The Case of Euro 2012 in Poland," Eastern European Economics, Taylor & Francis Journals, vol. 54(5), pages 437-458, September.
    11. Barbara Despiney & Waldemar Karpa, 2010. "Estimating economic regional effects of Euro 2012," Documents de travail du Centre d'Economie de la Sorbonne 10006, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    12. James W. Kolari & Seppo Pynnönen, 2010. "Event Study Testing with Cross-sectional Correlation of Abnormal Returns," The Review of Financial Studies, Society for Financial Studies, vol. 23(11), pages 3996-4025, November.
    13. T. Bettina Cornwell & Youngbum Kwon, 2020. "Sponsorship-linked marketing: research surpluses and shortages," Journal of the Academy of Marketing Science, Springer, vol. 48(4), pages 607-629, July.
    14. Alina Sorescu & Nooshin L. Warren & Larisa Ertekin, 2017. "Event study methodology in the marketing literature: an overview," Journal of the Academy of Marketing Science, Springer, vol. 45(2), pages 186-207, March.
    15. David E. Allen & Michael McAleer & Abhay K. Singh, 2019. "Daily market news sentiment and stock prices," Applied Economics, Taylor & Francis Journals, vol. 51(30), pages 3212-3235, June.
    16. Glen Searle, 2002. "Uncertain Legacy: Sydney's Olympic Stadiums," European Planning Studies, Taylor & Francis Journals, vol. 10(7), pages 845-860, October.
    17. John Fizel & Chris R. McNeil, 2017. "Bowling for Dollars," Journal of Sports Economics, , vol. 18(2), pages 162-181, February.
    18. Dollinger, Marc J. & Li, Xueling & Mooney, Christine H., 2010. "Extending the Resource-based View to the Mega-event: Entrepreneurial Rents and Innovation," Management and Organization Review, Cambridge University Press, vol. 6(2), pages 195-218, July.
    19. 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.
    20. Christian David Dick & Qingwei Wang, 2010. "The economic impact of the Olympic Games: evidence from stock markets," Applied Economics Letters, Taylor & Francis Journals, vol. 17(9), pages 861-864.
    21. Dimitrios Asteriou & Aristeidis Samitas & Dimitrios Kenourgios, 2013. "The London 2012 Olympic Games announcement and its effect on the London Stock Exchange," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(2), pages 203-221, May.
    22. Nikolas Papasyriopoulos & Athanasios Koulakiotis & Pyrros Papadimitriou & Dimitris Kalimeris, 2007. "An Event Study Analysis Of Stock Price Reaction To Mergers Of Greek Industrial And Construction Firms," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 1(2), pages 125-132.
    23. Holger Preuss, 2011. "A method for calculating the crowding-out effect in sport mega-event impact studies: The 2010 FIFA World Cup," Development Southern Africa, Taylor & Francis Journals, vol. 28(3), pages 367-385, September.
    24. Dimitrios Asteriou & Aristeidis Samitas & Dimitrios Kenourgios, 2013. "The London 2012 Olympic Games announcement and its effect on the London Stock Exchange," Journal of Economic Studies, Emerald Group Publishing, vol. 40(2), pages 203-221, March.
    25. Charles J. Corrado, 2011. "Event studies: A methodology review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 51(1), pages 207-234, March.
    26. John Gannon & Kevin Evans & John Goddard, 2006. "The Stock Market Effects of the Sale of Live Broadcasting Rights for English Premiership Football," Journal of Sports Economics, , vol. 7(2), pages 168-186, May.
    27. Eva Marikova Leeds & Michael A. Leeds & Irina Pistolet, 2007. "A Stadium by Any Other Name," Journal of Sports Economics, , vol. 8(6), pages 581-595, December.
    28. Christos Floros, 2010. "The impact of the Athens Olympic Games on the Athens Stock Exchange," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(6), pages 647-657, November.
    29. Viktoria C. E. Langer & Wolfgang Maennig & Felix Richter, 2018. "The Olympic Games as a News Shock," Journal of Sports Economics, , vol. 19(6), pages 884-906, August.
    30. Bana Abuzayed, 2013. "Sport and emerging capital markets: market reaction to the 2022 World Cup announcement," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 6(2), pages 122-141, June.
    31. Chun-Da Chen & Chih-Chun Chen, 2012. "Assessing the Effects of Sports Marketing on Stock Returns," Journal of Sports Economics, , vol. 13(2), pages 169-197, April.
    32. Gabrielle Berman & Robert Brooks & Sinclair Davidson, 2000. "The Sydney Olympic Games announcement and Australian stock market reaction," Applied Economics Letters, Taylor & Francis Journals, vol. 7(12), pages 781-784.
    33. Martin Mirman & Rajneesh Sharma, 2010. "Stock market reaction to Olympic Games announcement," Applied Economics Letters, Taylor & Francis Journals, vol. 17(5), pages 463-466.
    34. Law, Cherry & Cornelsen, Laura & Adams, Jean & Penney, Tarra & Rutter, Harry & White, Martin & Smith, Richard, 2020. "An analysis of the stock market reaction to the announcements of the UK Soft Drinks Industry Levy," Economics & Human Biology, Elsevier, vol. 38(C).
    35. Alex Edmans & Diego García & Øyvind Norli, 2007. "Sports Sentiment and Stock Returns," Journal of Finance, American Finance Association, vol. 62(4), pages 1967-1998, August.
    36. Zheng, Yao, 2015. "The linkage between aggregate investor sentiment and metal futures returns: A nonlinear approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 128-142.
    37. Christos Floros, 2010. "The impact of the Athens Olympic Games on the Athens Stock Exchange," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(6), pages 647-657, November.
    38. Aristeidis Samitas & Dimitris Kenourgios & Peter Zounis, 2008. "Athens' Olympic Games 2004 impact on sponsors' stock returns," Applied Financial Economics, Taylor & Francis Journals, vol. 18(19), pages 1569-1580.
    39. Mills, Brian M. & Rosentraub, Mark S., 2013. "Hosting mega-events: A guide to the evaluation of development effects in integrated metropolitan regions," Tourism Management, Elsevier, vol. 34(C), pages 238-246.
    40. Trevor Mules & Bill Faulkner, 1996. "An economic perspective on special events," Tourism Economics, , vol. 2(2), pages 107-117, June.
    41. Steffen Hundt & Andreas Horsch, 2019. "Sponsorship of the FIFA world cup, shareholder wealth, and the impact of corruption," Applied Economics, Taylor & Francis Journals, vol. 51(23), pages 2468-2491, May.
    42. Markus Brückner & Evi Pappa, 2015. "News Shocks in the Data: Olympic Games and Their Macroeconomic Effects," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(7), pages 1339-1367, October.
    43. Bana Abuzayed, 2013. "Sport and emerging capital markets: market reaction to the 2022 World Cup announcement," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 6(2), pages 122-141, June.
    44. Bijen Ramdas & Reinette van Gaalen & Jordy Bolton, 2015. "The announcement impact of hosting the FIFA World Cup on host country stock markets," Proceedings of Economics and Finance Conferences 2204970, International Institute of Social and Economic Sciences.
    45. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    46. repec:eme:mfppss:v:38:y:2012:i:5:p:543-558 is not listed on IDEAS
    47. Dimitrios Asteriou & Aristeidis Samitas & Dimitrios Kenourgios, 2013. "The London 2012 Olympic Games announcement and its effect on the London Stock Exchange," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(2), pages 203-221, May.
    48. Zawadzki, Krystian, 2013. "Euro 2012 economic impact on host cities in Poland," MPRA Paper 64522, University Library of Munich, Germany.
    49. Marc J. Dollinger & Xueling Li & Christine H. Mooney, 2010. "Extending the Resource-based View to the Mega-event: Entrepreneurial Rents and Innovation," Management and Organization Review, The International Association for Chinese Management Research, vol. 6(2), pages 195-218, July.
    50. Peter Abelson, 2011. "Evaluating Major Events and Avoiding the Mercantilist Fallacy," Economic Papers, The Economic Society of Australia, vol. 30(1), pages 48-59, March.
    51. Scarlett Cornelissen & Urmilla Bob & Kamilla Swart, 2011. "Towards redefining the concept of legacy in relation to sport mega-events: Insights from the 2010 FIFA World Cup," Development Southern Africa, Taylor & Francis Journals, vol. 28(3), pages 307-318, September.
    52. Eshghi, Kamran, 2022. "Are sports sponsorship announcements good news for shareholders? A meta-analysis," International Journal of Research in Marketing, Elsevier, vol. 39(1), pages 268-287.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amélie Charles & Olivier Darné, 2016. "Stock market reactions to FIFA World Cup announcements: An event study," Economics Bulletin, AccessEcon, vol. 36(4), pages 2028-2036.
    2. Eshghi, Kamran, 2022. "Are sports sponsorship announcements good news for shareholders? A meta-analysis," International Journal of Research in Marketing, Elsevier, vol. 39(1), pages 268-287.
    3. Stefan Szymanski & Bastien Drut, 2020. "The Private Benefit of Public Funding: The FIFA World Cup, UEFA European Championship, and Attendance at Host Country League Soccer," Journal of Sports Economics, , vol. 21(7), pages 723-745, October.
    4. Steffen Hundt & Andreas Horsch, 2019. "Sponsorship of the FIFA world cup, shareholder wealth, and the impact of corruption," Applied Economics, Taylor & Francis Journals, vol. 51(23), pages 2468-2491, May.
    5. Michał Marcin Kobierecki & Michał Pierzgalski, 2022. "Sports Mega-Events and Economic Growth: A Synthetic Control Approach," Journal of Sports Economics, , vol. 23(5), pages 567-597, June.
    6. Ding, Li & Lam, Hugo K.S. & Cheng, T.C.E. & Zhou, Honggeng, 2018. "A review of short-term event studies in operations and supply chain management," International Journal of Production Economics, Elsevier, vol. 200(C), pages 329-342.
    7. Dimitrios Kourtidis & Željko Šević & Prodromos Chatzoglou, 2016. "Mood and stock returns: evidence from Greece," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(2), pages 242-258, May.
    8. Chia-Lin Chang & Shu-Han Hsu & Michael McAleer, 2018. "An Event Study Analysis of Political Events, Disasters, and Accidents for Chinese Tourists to Taiwan," Sustainability, MDPI, vol. 10(11), pages 1-77, November.
    9. Chia-Lin Chang & Shu-Han Hsu & Michael McAleer, 2018. "An Event Study of Chinese Tourists to Taiwan," Tinbergen Institute Discussion Papers 18-003/III, Tinbergen Institute.
    10. Massimiliano Castellani & Pierpaolo Pattitoni & Roberto Patuelli, 2015. "Abnormal Returns of Soccer Teams," Journal of Sports Economics, , vol. 16(7), pages 735-759, October.
    11. 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.
    12. Seppo Pynnonen, 2022. "Non-Parametric Statistic for Testing Cumulative Abnormal Stock Returns," JRFM, MDPI, vol. 15(4), pages 1-14, March.
    13. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    14. Truzaar Dordi & Olaf Weber, 2019. "The Impact of Divestment Announcements on the Share Price of Fossil Fuel Stocks," Sustainability, MDPI, vol. 11(11), pages 1-20, June.
    15. Alper Veli ÇAM, 2015. "The Effects of Sporting Success on Stock Returns: An Application in Istanbul Stock Exchange," Journal of Economics Library, KSP Journals, vol. 2(3), pages 147-154, September.
    16. Ogawa, Ryoh, 2017. "Using REIT Data to Assess the Economic Worth of Mega-Events: The Case of the 2020 Tokyo Olympics," MPRA Paper 78829, University Library of Munich, Germany.
    17. Harjito, Dwipraptono Agus & Alam, Md. Mahmudul & Dewi, Rani Ayu Kusuma, 2021. "Impacts of International Sports Events on the Stock Market: Evidence from the Announcement of the 18th Asian Games and 30th Southeast Asian Games," OSF Preprints 4dgne, Center for Open Science.
    18. Jerome Geyer-Klingeberg & Markus Hang & Matthias Walter & Andreas Rathgeber, 2018. "Do stock markets react to soccer games? A meta-regression analysis," Applied Economics, Taylor & Francis Journals, vol. 50(19), pages 2171-2189, April.
    19. Błażej Prusak & Marcin Potrykus, 2021. "Short-Term Price Reaction to Filing for Bankruptcy and Restructuring Proceedings—The Case of Poland," Risks, MDPI, vol. 9(3), pages 1-14, March.
    20. Blazej Prusak & Marcin Potrykus, 2020. "Short-term Price Reaction to Involuntary Bankruptcies Filed in Bad Faith: Empirical Evidence from Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 873-889.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jospec:v:24:y:2023:i:6:p:759-800. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.