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Soccer Sponsor: Fan Or Businessman?

Author

Listed:
  • Iuliia Naidenova

    () (National Research University Higher School of Economics)

  • Petr Parshakov

    () (National Research University Higher School of Economics)

  • Alexey Chmykhov

    () (National Research University Higher School of Economics)

Abstract

This paper investigates how soccer sponsorship influences the financial performance of sponsors. We use an instrumental variable regression framework combined with a fixed effects model to avoid the possible endogeneity raised by omitted variables and reverse causality. The number of tweets containing both team and sponsor names were collected to use as the instrumental variable. Top European leagues were analyzed. Our results show that soccer sponsorship is more charity than commercial investment. Shareholders should be aware of sponsorship deals, and senior management should analyze the financial assumptions of cash flow forecasting for such projects carefully.

Suggested Citation

  • Iuliia Naidenova & Petr Parshakov & Alexey Chmykhov, 2014. "Soccer Sponsor: Fan Or Businessman?," HSE Working papers WP BRP 28/FE/2014, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:28/fe/2014
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    File URL: http://www.hse.ru/data/2014/03/03/1330161003/28FE2014.pdf
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    References listed on IDEAS

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    1. Johan Eklund, 2010. "Q-theory of investment and earnings retentions—evidence from Scandinavia," Empirical Economics, Springer, vol. 39(3), pages 793-813, December.
    2. 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.
    3. Sneath, Julie Z. & Finney, R. Zachary & Close, Angeline Grace, 2005. "An IMC Approach to Event Marketing: The Effects of Sponsorship and Experience on Customer Attitudes," Journal of Advertising Research, Cambridge University Press, vol. 45(04), pages 373-381, December.
    4. Matthias Reiser & Christoph Breuer & Pamela Wicker, 2012. "The Sponsorship Effect: Do Sport Sponsorship Announcements Impact the Firm Value of Sponsoring Firms?," International Journal of Sport Finance, Fitness Information Technology, vol. 7(3), pages 232-248, August.
    5. Love, Inessa & Zicchino, Lea, 2006. "Financial development and dynamic investment behavior: Evidence from panel VAR," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(2), pages 190-210, May.
    6. Joao F. Gomes, 2001. "Financing Investment," American Economic Review, American Economic Association, vol. 91(5), pages 1263-1285, December.
    7. Deitz, George D. & Evans, Robert D. & Hansen, John D., 2013. "Sponsorship and shareholder value: A re-examination and extension," Journal of Business Research, Elsevier, vol. 66(9), pages 1427-1435.
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    More about this item

    Keywords

    soccer; sponsorship; instrumental variable; twitter;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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