The impact of mega-sporting events on stock markets Research Completed

Title

The impact of mega-sporting events on stock markets

Lead Author

Li, Xi

Organisation(s)

AUT University

Publication Year

2007

Publisher

AUT University

Contacts

No Contact Details supplied

Abstract

This dissertation examines the impact of four major international mega-sporting events, namely Summer Olympic Games, Winter Olympic Games, FIFA World Cups and European Football Championships on stock markets of host countries. In particular, this dissertation uses an event study methodology to investigate the stock market reaction on events defined as announcement date, beginning date and the event end date. The empirical results indicate that there is no announcement date effect on whole stock markets. Despite splitting the host countries based on the sizes of market capitalization and the age of stock markets, the impact remains insignificant. Moreover, there is no beginning date effect on whole stock markets. However, there is a significant negative effect after the end date of mega-sporting events. In addition, this dissertation analyses the performance of stock market in host country in mega-sporting event year as well as the impact of mega-sporting event on emerging stock market is a subject of detailed analysis.The study of annual returns showed that the stock market in four countries performed extremely well in the year when they hosted a particular event: Greece regarding the 2004 Summer Olympic Games, South Korea regarding the 2002 FIFA World Cup, Portugal regarding the 2004 European Football Championships and United States regarding the 1996 Summer Olympic Games. Finally, the sector analysis for emerging markets shows that sectors like the Consumer Goods sector-especially the Beverages, Brewers and Soft Drinks sub sectors – and the Industrial sector-especially the Heavy Construction, Industrial Goods and Construction Material sub sectors – performed better than the rest of market.

 

Keywords:

Mega-sporting Events, Stock Markets, Summer Olympic Games, Winter Olympic Games, European Football Championships,  FIFA World Cups

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October 2, 2012