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Frequent News and Pure Signals: The Case of a Publicly Traded Football Club

Author

Listed:
  • Georg Stadtmann

    () (Department of Economics, WHU Koblenz
    Institute for Development Strategies, Indiana University)

Abstract

We use stock market data for Borussia Dortmund GmbH & Co. KGaA – one of the leading German football clubs – for an application of the news model. Due to the specific characteristics of the news generating process, the case of a publicly traded sport club is a very appropriate candidate for testing this model. By applying a traditional as well as a reversed news model we elaborate whether new information can explain subsequent changes in the stock price of Borussia Dortmund. We find that sport as well as corporate governance related variables are important drivers of the stock price.

Suggested Citation

  • Georg Stadtmann, 2006. "Frequent News and Pure Signals: The Case of a Publicly Traded Football Club," IASE Conference Papers 0625, International Association of Sports Economists.
  • Handle: RePEc:spe:cpaper:0625
    as

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    File URL: http://web.holycross.edu/RePEc/spe/Stadtmann_StockMarket.pdf
    File Function: Paper presented at the 8th Annual IASE Conference in Bochum, Germany, May 2006
    Download Restriction: no

    Citations

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    Cited by:

    1. van Ours, Jan C & Van Tuijl, Martin, 2014. "In-season head-coach dismissals and the performance of professional football teams," CEPR Discussion Papers 10191, C.E.P.R. Discussion Papers.
    2. Ender Demir & Hakan Danis, 2011. "The Effect of Performance of Soccer Clubs on Their Stock Prices: Evidence from Turkey," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 47(0), pages 58-70, September.
    3. Ender Demir, 2015. "Aviation Accidents and Stock Market Reaction: Evidence from Borsa Istanbul," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 3(1), pages 51-56.
    4. Jan C. van Ours & Martin A. van Tuijl, 2016. "In-Season Head-Coach Dismissals And The Performance Of Professional Football Teams," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 591-604, January.
    5. Jørgensen, Casper W. & Moritzen, Mark R. & Stadtmann, Georg, 2012. "The news model of asset price determination: An empirical examination of the Danish football club Brøndby IF," Discussion Papers 313, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    6. Adrian R. Bell & Chris Brooks & David Matthews & Charles Sutcliffe, 2012. "Over the moon or sick as a parrot? The effects of football results on a club's share price," Applied Economics, Taylor & Francis Journals, vol. 44(26), pages 3435-3452, September.
    7. Fung, Ka Wai Terence & Demir, Ender & Lau, Chi Keung Marco & Chan, Kwok Ho, 2015. "Reexamining sports-sentiment hypothesis: Microeconomic evidences from Borsa Istanbul," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 34(C), pages 337-355.
    8. 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.

    More about this item

    Keywords

    News Model; Football Industry; Betting Odds; Stock Market;

    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

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