The Winner’s Curse: Examining the Role of Institutional Quality in Attracting FDI for FIFA World Cup Hosts

Jihad Ait Soussane () and Aomar Ibourk ()
Additional contact information
Jihad Ait Soussane: University Ibn Tofail
Aomar Ibourk: University Cadi Ayyad, Marrakesh, Morocco, Laboratoire d’Innovation, de Recherche en Économie Quantitative et Développement Durable (LIREQ-2D)

Eastern Economic Journal, 2025, vol. 51, issue 4, No 1, 552 pages

Abstract: Abstract This paper examines the impact of hosting the FIFA World Cup on foreign direct investment (FDI), focusing on the moderating role of institutional quality, using panel data from 195 countries between 1960 and 2023. The study is motivated by Morocco’s successful bid to co-host the 2030 FIFA World Cup with Spain and Portugal, which has sparked debates on the economic benefits and potential risks of hosting mega-sports events. While such events can attract significant investment, they also pose challenges, particularly for countries with weak institutional frameworks, where investments may become “white elephants”. The findings suggest that countries with stronger institutional quality are more likely to realize the economic benefits of hosting the World Cup, while those with weaker institutions may experience limited returns, falling victim to the “winner’s curse”. This scenario often leads to substantial infrastructure investments that do not translate into long-term economic growth. The study underscores the importance of strengthening institutional frameworks to mitigate these risks. Policy recommendations emphasize the need for prospective host countries to prioritize anti-corruption measures, enhance regulatory frameworks, and ensure political stability. By addressing these institutional challenges, countries can maximize the potential economic gains from hosting mega-sports events like the FIFA World Cup.

Keywords: Mega-sports events; FIFA World Cup; Foreign direct investment; Winner’s curse; Institutional quality (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41302-025-00307-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:easeco:v:51:y:2025:i:4:d:10.1057_s41302-025-00307-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/41302

DOI: 10.1057/s41302-025-00307-7

Access Statistics for this article

Eastern Economic Journal is currently edited by Allan Zebedee and Cynthia Bansak

More articles in Eastern Economic Journal from Palgrave Macmillan, Eastern Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().