Sport Sentiments and Stock Returns: Example of FIFA World Cups

Jen-Sin Lee and Ching-Wei Chiu

Applied Economics and Finance, 2017, vol. 4, issue 2, 44-56

Abstract: This paper investigates the relation between sport sentiments and excess stock returns, and our data is from the 17th to 20th FIFA World Cups. Many studies find the relation between sport sentiments and stock market returns. In contrast to the previous studies, this paper considers seven conditions: (1) Considering stock markets are efficient markets, this paper uses not only close price but also open price to estimate excess stock returns which is affected by game results; (2) This paper further considers that sport sentiments affect sponsors¡¯ excess stock returns (this point is seldom discussed by the past literature); (3) This paper further considers a time-lagged effect between sport sentiments and excess stock returns. (4) This paper further considers the persistent effect of previous games result. (5) This paper further employs the samples by not only for all participant countries but also for the each of participant countries. (6) This paper further considers the conditions of extreme wins and extreme loses. (7) This paper further considers the samples of championship games to exam the relation between sport sentiments and excess stock returns. Our results find that sport sentiments does not affect stock market returns, the reason is that investors are rational in dealing with sport sentiments (FIFA World Cup) and the stock trading decisions. This paper further finds Sponsors effect hypothesis: A significant positive/ negative effect on sponsors¡¯ excess stock returns after wins/ loses in the championship games, and this effect only occurs on the open price of the next trading day. These empirical results can offer an important information for the investors of sport sponsor stocks.

Keywords: sport sentiments; stock returns; open price; sponsor; sponsors effect hypothesis (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://redfame.com/journal/index.php/aef/article/view/2108/2197 (application/pdf)
http://redfame.com/journal/index.php/aef/article/view/2108 (text/html)

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:rfa:aefjnl:v:4:y:2017:i:2:p:44-56

Access Statistics for this article

More articles in Applied Economics and Finance from Redfame publishing Contact information at EDIRC.
Bibliographic data for series maintained by Redfame publishing ().