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The Winner Takes It All: Investor Sentiment and the Eurovision Song Contest

Menachem Abudy, Yevgeny Mugerman and Efrat Shust

Journal of Banking & Finance, 2022, vol. 137, issue C

Abstract: This paper investigates the stock market reaction to a change in investor mood following the Eurovision Song Contest—an annual international song competition and one of the most watched non-sporting events globally. Contrary to existing literature on international competitions, we find a positive swing in investor sentiment in the winning country. The elevated atmosphere is reflected in a positive abnormal return of approximately 0.35% on the first trading day after the victory. This finding is robust to various event-study methods and to various benchmarks. This positive return is reversed several days later. Further, we do not find any indication of negative sentiment in other participating countries; specifically, in countries perceived as the losers of the contest. Finally, we do not find any indication that the positive market reaction reflects economic benefits stemming from a victory. Overall, we conjecture that a competition structure is an important determinant of investor sentiment in stock markets.

Keywords: Investor sentiment; Investor mood; Stock market reaction; Price reversal (search for similar items in EconPapers)
JEL-codes: G10 G14 G41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:137:y:2022:i:c:s0378426622000322

DOI: 10.1016/j.jbankfin.2022.106432

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