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How the ‘Hand of Henry’ Benefited the South African Economy

Johan Fourie and María Santana-Gallego
Authors registered in the RePEc Author Service: Johan Fourie () and Maria Santana Gallego ()

No 508, Working Papers from Economic Research Southern Africa

Abstract: This paper highlights an aspect of mega-events that has been neglected: the changing composition of tourist arrivals during and after theevent. The change happens because, in the FIFA World Cup, a quota of countries participates from each continent and this opens up new tourismmarkets. We show that the 2010 FIFA World Cup in South Africa had a smaller growth effect on South Africa’s traditional tourism markets butattracted a large increase from non-traditional ones. However, the size of the effect, we find, is partly due to randomness: it depends on matchresults in the qualification phase of the tournament. We use a new longrun dataset of tourism flows to South Africa and a gravity model fortourism flows and run counterfactual examples of play-off matches during the qualification phase to estimate how much more South Africa couldhave benefited had larger or richer countries qualified. We conclude that the random results of a few play-off games significantly affect the extentto which the World Cup benefits the host country’s economy.

Keywords: mega-event; tourism; FIFA World Cup; football; soccer; South Africa; gravity model; counterfactual analysis (search for similar items in EconPapers)
JEL-codes: C8 N3 N4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-spo
Date: 2015
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