Market Impact of International Sporting and Cultural Events

António Miguel Martins and Ana Paula Serra (aserra@fep.up.pt)
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António Miguel Martins: Faculdade de Economia da Universidade do Porto, Portugal

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: This paper investigates the impact of international sporting and cultural events on national stock markets. We study market reaction to the announcements of the selected country hosting mega-events such as the Olympic Games, the World and the European Football Cups and World Exhibitions. First, we evaluate the abnormal returns of winning bidders at (and around) the announcement date at market and industry-levels. Second, we analyze the determinants of the variation in abnormal returns across events and industries and control for the prior probability of observing the event. Third, on the basis of a simple model of partial anticipation, we reexamine the abnormal returns observed for the winning and losing countries. Our initial results suggest that the abnormal returns are not consistently different from zero. Further, when we look at particular industries, we find no evidence supporting that industries, that a priori were more likely to extract direct benefits from the event, observe positive significant effects. Yet when we control for the prior expectations, the announcement of these megaevents is associated with a positive stock market reaction in the nominated country and a negative reaction in the losing country. Overall we interpret our findings as supportive of rational asset pricing and partial anticipation.

Keywords: Market efficiency; Event studies; Mega-events (search for similar items in EconPapers)
JEL-codes: G14 G31 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2007-04
New Economics Papers: this item is included in nep-cul and nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Market impact of international sporting and cultural events (2011)
Working Paper: Market Impact of International Sporting and Cultural Events (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:240

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