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Over the Moon or Sick as a Parrot? The Effects of Football Results on a Club's Share Price

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  • Adrian Bell

    ()

  • Chris Brooks

    () (Icma Centre - University of Reading)

  • David Matthews

    ()

  • Charles Sutcliffe

    ()

Abstract

This paper considers the impact of match results on the stock returns of English football clubs. We propose that the magnitude of the response to a given result depends on the importance of the game, which is measured in two ways. First, we consider the extent to which the clubs are close rivals vying for similar league positions, as winning such games is particularly significant. Second, we argue that each individual game becomes more important for those clubs likely to be promoted or relegated as the season draws to a close, since a given match will have increasing information content concerning the final league position of the club. Using a fairly large panel comprising data for 19 clubs, we find some support for the notion that stock prices are more affected by the results of important matches than matches of lesser importance. We also observe that the difference between the number of points the club secures from a given match, and the number it was expected to secure, affects its stock price, as does the number of goals that the club under question scores in the match, relative to its competitor.

Suggested Citation

  • Adrian Bell & Chris Brooks & David Matthews & Charles Sutcliffe, 2011. "Over the Moon or Sick as a Parrot? The Effects of Football Results on a Club's Share Price," Post-Print hal-00709557, HAL.
  • Handle: RePEc:hal:journl:hal-00709557
    DOI: 10.1080/00036846.2011.577017
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00709557
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    References listed on IDEAS

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    Cited by:

    1. Hlasny, V. & Kolaric, S., 2015. "Catch Me If You Can - Referee–Team Relationships and Disciplinary Cautions in Football," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 74994, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Berna KIRKULAK ULUDAG & Secil Sigali, 2016. "Futbol Mac Sonuclarinin 4 Buyuklerin Hisse Senedi Getirilerine Etkisi," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 16(4), pages 575-585.
    3. repec:sae:jospec:v:19:y:2018:i:2:p:230-278 is not listed on IDEAS
    4. Teodor Dima, 2015. "Manchester United’S Ipo (2012)," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 65-71, February.
    5. Pedro Godinho & Pedro Cerqueira, 2018. "The Impact of Expectations, Match Importance, and Results in the Stock Prices of European Football Teams," Journal of Sports Economics, , vol. 19(2), pages 230-278, February.
    6. Ferreira, Paulo & Loures, Luís & Nunes, José Rato & Dionísio, Andreia, 2017. "The behaviour of share returns of football clubs: An econophysics approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 472(C), pages 136-144.
    7. Barry Reilly, 2015. "The Demand for League of Ireland Football," The Economic and Social Review, Economic and Social Studies, vol. 46(4), pages 485-509.
    8. Kenneth Linna & Evan Moore & Rodney Paul & Andrew Weinbach, 2014. "The Effects of the Clock and Kickoff Rule Changes on Actual and Market-Based Expected Scoring in NCAA Football," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 2(2), pages 1-14, April.
    9. repec:ejn:ejefjr:v:5:y:2017:i:4:p:36-49 is not listed on IDEAS

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