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The Economic Impact of Olympic Games: Evidence from Stock Markets

Christian Dick and Qingwei Wang

No 08-060, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: By means of an event study of stock market reactions to the announcement of the Olympic Games host cities, we find a significant and positive announcement effect of hosting the Summer Games, with a cumulative abnormal return of about 2% within a few days. We do not find any significant results for the Winter Games. Neither do we detect a significant impact when bidders lose the competition. Our results differ from those of a similar study by Mirman and Sharma (2008), who find that the Winter Games are subject to a significantly negative announcement impact, while the Summer Games are not. Our results, however, rely on a larger sample of 15 Olympic events and are obtained by assessing the abnormal returns after the announcement against a ?business?as?usual" situation (instead of testing the difference between winner group and loser group). Our findings are in line with economic intuition, since the Summer Games represent a larger event and are thus more likely to have a significant impact. We also find that among the winners, small economies tend to have greater cumulative abnormal returns than their large peers.

Keywords: Olympic Games; economic impact; event study; stock markets (search for similar items in EconPapers)
JEL-codes: G14 L83 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-spo, nep-tur and nep-ure
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Journal Article: The economic impact of the Olympic Games: evidence from stock markets (2010) Downloads
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