StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

The Impact of Sporting Events on Stock Markets - Essay Example

Comments (0) Cite this document
Summary
Sports have had a reasonable history of a correlation with financial markets. During the past few years an occurrence of any sporting event has certainly added towards the uplift of the country's economy. Sporting events encourages investments into various sectors of the industry / economy including hotels / hospitality, food chains, tourism etc.
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
The Impact of Sporting Events on Stock Markets
Read TextPreview

Extract of sample "The Impact of Sporting Events on Stock Markets"

Download file to see previous pages If however the overall mood in the country is elated it often reflects in investment decisions and in return in the stock markets.
At the advent of any mega sporting contest there is an increase in economic activity in the host country. Months before the event actually start, stadiums are built or renovated, roads are paved, investment is made in horticulture and in general a lot of hustle and bustle takes place. This way the major beneficiaries include developers, building material, engineering and construction companies. Sportswear and sporting equipment vendors enjoy amplified sales.
Weeks prior to the event, air fares shoot up, hotel occupancy rises, restaurants get more business and in some cases, even cell phone companies enjoy greater sales and when the event actually starts consumer companies in general gain.
In addition to this, media related revenues pick up prior to such mega sporting events. Sponsorship rates, advertising charges all increase promoting the media industry as a whole. In the cricket crazy nations of the Indian Subcontinent 75% of the sports-related advertising revenues are generated through cricket events1.
In major sporting contests like Olympics and Soccer world cup, awarding or winnng the contest can greatly affect national pride. In the Indian Subcontinent, a cricket match of the World Cup between arch rivals India and Pakistan, can tremendously effect the general public's mood. The matches seem more like mini wars. The entire country backs its national team and so it can alleviate the investor mood therefore when his team wins, his self-confidence rises and so does his willingness to undertake new investments, and a loss may results in lower self-confidence and a curb new investment activity.
One of the major events in the sporting industry, Olympics, strongly effect economic activity in the host country. . If we go back in history and look at the past 11 Olympics, the local index of the host country has risen 25 percent on average in the 12 months before the Games year.
Table 12 indicates stock market performance in the year prior to the games among the six most recent Olympics hosts1
Year
Host Country
Index
Impact (%)
1984
USA
S&P
17
1988
Korea
Kospi
90
1992
Spain
IBEX
33
1996
USA
S&P
33
2000
Australia
ASX
14
2004
Greece
ASE
29
Research by Edmans (2006) indicates that losses in critical soccer matches, elimination from the World Cup tournament is linked with a next-day return on the national stock market index that is 38 basis points lower than average. Similar losses are also seen in other sports like cricket, rugby and basketball but the impact is minor in size.
Research by Wann (1994) shows that if teams perform well, their fans show a strong positive reaction and a similar negative reaction when the reverse is the case. Such mood swings may effect the stock market index.
The decision of where a major sporting tournament will take place also holds significance. In 2006, South African stocks nose dived when the world soccer governing body FIFA declared Germany as the hosts of the tournament. This was primarily because majority of the South Africans believed that their country would be awarded the honor of hosting the World Cup. The general gloom in the country was reflected in the stock market. Subsequently, stocks in the building and industrial sector, construction ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Impact of Sporting Events on Stock Markets Essay”, n.d.)
The Impact of Sporting Events on Stock Markets Essay. Retrieved from https://studentshare.org/miscellaneous/1499042-the-impact-of-sporting-events-on-stock-markets
(The Impact of Sporting Events on Stock Markets Essay)
The Impact of Sporting Events on Stock Markets Essay. https://studentshare.org/miscellaneous/1499042-the-impact-of-sporting-events-on-stock-markets.
“The Impact of Sporting Events on Stock Markets Essay”, n.d. https://studentshare.org/miscellaneous/1499042-the-impact-of-sporting-events-on-stock-markets.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The Impact of Sporting Events on Stock Markets

The Economic Impacts of Major Sporting Events

.... Most of their discussion can be used related to sporting events and sports economy. According to the authors (Forster & Pope 2004, 3): Starting as unstable, incomplete, and disjointed conceptual systems held by market actors—which is revealed by the cacophony of uses, claims, and product standards that characterise emerging product markets—product markets become coherent as a result of consumers and producers making sense of each others’ behaviours. Within the perspective of political economy, it can be argued that this is not a fair cluster of economic exchanges. Rather, various power structures emerge that can influence the choices of the players in both parties. Economic Impacts of Major Sporting Events Economists frequently oppose...
12 Pages(3000 words)Essay

Impact of Major Sporting Events on Host Communities

2010). Thus, this essay critically evaluates whether major sport events are of major benefit to the host city, region, or country. Social Impacts Tourism research has presented a wide array of proof that major sport events can have negative and positive impacts on a host city. Several of the positive outcomes concern economic gain or national honour and high spirits among citizens. This national honour leads to the ‘psychic income’ related to hosting a major event (Gratton & Henry 2001, 32). Moreover, major sporting events have been said to introduce nations to new knowledge and lead to a liberalisation of ideals in closed societies. As a worldwide event, sport draws active involvement and mass viewership, both creating the sub-c...
8 Pages(2000 words)Essay

Fan Crimes at Sporting Events

...?Why Do Fans Commit Crimes at Sporting Events? In a Giants fan was badly beaten by other fans at Dodger Stadium in Los Angeles to the extent that he was likely to suffer brain damage . Unfortunately, for all concerned, this story is not unprecedented or even unusual. Fans at sports games are well known to commit a wide range of different crimes, commonly including violence against other fans. Violence among fans is commonly associated with European football, with numerous examples of riots and violence among fans. However, American games have their own share of violent and criminal behavior . This has been an ongoing problem for many years, despite efforts to curb the behavior, such as preventing many stadiums from selling alcohol...
6 Pages(1500 words)Research Paper

Governments Role in Organizing Big Sporting Events

Decisions of this nature should be based upon and measured against certain basic principles regarding the proper role of government. Functions of a government can be broadly categorized as;
In fact these are just indicative types of functions. It is amply clear from these points that the government is supposed to perform a range of tasks in order to look after its people. Now the question arises, "Should the government give financial aid to such projects like the World Cup Soccer, or the Olympics events and why" On the face of it, one ponders to think as to why the government should go whole hog after such an event ignoring its majority of the priority areas. But on deeper thought we realize that there's something beyond the...
4 Pages(1000 words)Essay

Stock and Commodity Markets

With globalisation, MNCs began to explore the markets outside there domestic grounds. Stock and commodities market too are being made attractive by respective governments, which is also resulting in wealth creation for the citizens and companies alike. If used judiciously, 'Stock and commodity trading' greatly helps in tapping resources for developmental projects, welfare schemes and other such nation building exercises. In order to leverage the economies of scale at different locations, such companies try to set up some of their operations at different locations. Moreover, with the advancement in ICT, global distances have tended to become smaller while the world is gradually being seen as a global village. Bracken (2004) underl...
5 Pages(1250 words)Essay

Finance- Global Stock Markets

...Israel-US Stock Market Performance The following brief discussion will track the stock markets in the United s (the Dow Jones in New York and the Israeli stock exchange. The discussion will first compare and contrast the movements of the two indexes. Subsequently, it will attempt to link these movements to current events in the world. The period covered will be from September 20 to late November 2010. The graph below tracks the performance of the two stock exchanges. US – Israel Stock Exchange Closing, September 20 – November 24, 2010 Closing Price USD Weeks, Commencing September 20, 2010 The first thing that stands out on this graph is the remarkable stability, during the period covered, in both of these stock exchanges. The Israeli...
4 Pages(1000 words)Essay

The State and the Impact That Homelessness Has on Children in Miami-Dade

Miami-Dade County has the highest homeless rate in the State of Florida. It ranks first in ‘families living in poverty’ among 25 major US cities (JLM, n.d.). Poverty and high rate of rentals have been considered the two main causes of homelessness. As much as 83% of people experience homelessness for a short period and usually require assistance in finding housing or rent subsidy. About 17% of the people in Miami-Dade are homeless for longer periods and require permanent supportive housing. The total number of homeless persons on the street in January 2006 was 4709 (Camillus.org). Fluctuations in the homeless count can occur depending upon the weather, time of the year and the methodology.

Florida accounts f...
6 Pages(1500 words)Essay

The impact of Plant Disease on New Zealand

Transmission of PMTV occurs through inoculation of sap in 26 species belonging to Solanaceae or Chenopodiaceae and to Tetragonia expansa and also through grafting (A. Reavy., W. Kashiwazaki., & Barker,1995 ). In some cases, PMTV is known to be transmitted by mechanical inoculation also.

Since PMTV is vectored only through S.subterranea the infection of plants with PMTV depends on the life cycle of S.subterranea which takes about 10-14 days. The life cycle of S.subterranean takes place in 2 phases: Phase I) This is the primary stage of the life cycle initiated with the germination of resting spores known as sporangiosori or cystosori persisting in the soil as spore balls with thick cell walls into zoosporangia. These...
6 Pages(1500 words)Report

Money & Capital Markets

The subprime lending crisis rocked the U.S. economy in late 2006 and early 2007. Subprime lending refers to the loans which are provided to the borrowers having less than ideal credit histories. In other words, subprime lending is provided to persons who do not qualify for conventional credits or loans.

The subprime loans gave rise to inflated credit facilities, increased availability of infrastructure and more circulation of more currency in the economy. But this system also gave rise to unprecedented meltdown, liquidation of funds and resultant heavy losses of financial institutions due to non-payment of loans by the borrowers.

The main reasons for the crisis are more than one. They are the failure of the b...
10 Pages(2500 words)Assignment

The Impact of Comic Books on Boys and Girls

Marvel comics made the first important steps in the particular sector – at the decade of 1960s, the firm presented through its books a series of innovative stories that have until today a significant influence to the public - the characters and the appearance of the stars of Marvel and the other firms that govern the specific sector since the decade of 1960 will be analyzed in the sections that follow. The current paper refers to a specific aspect of the particular sector (comic books): the perspectives of the firms operating in this industry on boys and girls; special reference is made to the change of these perspectives from the 1960s until today. Marvel is used – among other firms – as indicative example of th...
15 Pages(3750 words)Research Proposal

Impact of Feedback on Students Behaviour

One group of students verbalized aloud while solving problems during all sessions, the second group verbalized aloud during the first half of the training program (first three sessions) but not during the second half, and the third group did not verbalize. It was expected that overt verbalization during the first half of training would help students learn how to work subtraction problems in a strategic (algorithmic) fashion. To the extent that students could then shift this means of regulating their task performance to a covert level, we felt that continued verbalization would offer no benefits. Researchers have shown that once strategic task behaviors are instilled, overt verbalization may be discontinued with no performance decr...
23 Pages(5750 words)Case Study

The Economic Impact of the Emergence of China and India

The main macroeconomic variable that toys in the global economy’s shift are the emergence of India and China as new superpowers. This emergence certainly has a number of implications, but among the most relevant are: disruption of the equilibrium of the global economy which results in rising demand of goods, giving way to worldwide inflation; the attractiveness of outsourcing to these countries due to low cost but high talent workforce of these countries for cheaper operations.
The growing middle class of China and India results in booming demand for the automobile industry. This increase in demand, with the increasing purchasing power of these countries’ people, is not limited to automobiles but more apparent in...
10 Pages(2500 words)Assignment

Impact of Motivational Factors upon Employees at Bank AlFalah and Standard Chartered Pakistan

The impacts of these policies upon the employees of the banks will be studied with the help of the responses of the employees of both of the banks. The proposed research study will present the case studies of these two banks by employing a qualitative research approach. The data and information for the study will be collected through secondary and primary resources i.e. through literature review and in-depth interviews of the employees of both the banks. The study will help in the identification of the major strengths and weaknesses present in the motivational policies of these banks and will allow proposing the formulation of improved policies.

Motivation basically refers to satisfying one’s needs through differe...
14 Pages(3500 words)Research Proposal

Emergency Economic Stabilization Act of 2008 and How It Has Impacted the Financial Markets

Though there were objections from various quarters about the huge amounts of tax payer’s money being used in the bailout of huge corporates, the Act has been successful in moving the downturn towards a flat point and now has started slowly moving towards a recovery stage. The various programs under the EESA 2008 have played a significant role in the financial sector, housing mortgage, and banking institutions to save the institutions from complete disaster.

The Emergency Economic Stabilization Act is a huge taxpayer bailout designed to rescue the financial sector. The amount of money to be used is around $700 billion or $2000 per American citizen (Public mark up). Emergency Economic Stabilization Act of 2008 is al...
10 Pages(2500 words)Research Paper

Immigration and Its Impact on the United Kingdom

For example, for farming communities, fertile and well-watered land has been a pull factor in migration. Business opportunities and political stability are also examples of pull factors.
Since the turn of the 20th century, Great Britain and Northern Ireland have experienced a great influx of foreigners migrating into the country due to pull or push factors. There have been different waves of migrations to the United Kingdom, which has had different impacts. Because of this, the United Kingdom has had to respond in several ways, which includes coming up with new acts on immigration, nationality, and providing asylum to refugees.1 However, the topic of migration to the United Kingdom has attracted different political views and...
23 Pages(5750 words)Assignment

Diversification in Emerging Stock Markets

... to financial shocks from events in major stock markets of the world. To analyze this, impulse response functions were used that can monitor the impact of a standard deviation shocks to any innovations resulting from the endogenous variable’s current and future values. In simple terms, this means that a shock to a jth variable can directly impact the variable itself and the shock can also be transmitted along all endogenous variables given the dynamic structure of the vector error correction model. Specifically, changing the εt in equation 4 will change the current values of the MENA series. It will further affect the future values of the index differential of the series as also the variation in the world stock indices since the lagged...
41 Pages(10250 words)Research Paper

Volunteer and Mega Sporting Events

...Volunteer and Mega Sporting Events Money acts as a major incentive for most of the jobs and services that people offer today in the world. People work so that they can derive benefits out of it later. However what needs to be focused here is that money is not the only benefit for which people work and at many places we come across volunteers who offer their services without any monetary gains. This paper will focus on why volunteers are hired and managed and what motivates them to be loyal to their jobs. More over this paper will focus on examples of members of St. John Ambulance and their voluntary services and those volunteers hired by the Centre of volunteering. This article will touch upon some key concepts and definitions...
10 Pages(2500 words)Article

Media Representation of Females in Sporting Events

... Media Representation of Females in Sporting Events Research Questions After carrying out a thorough analysis of the available academic and media sources pertaining to the topic under consideration, the research scholar came out with the following research questions. 1) Does the media assign less time and space to the coverage of female sporting events? 2) Are the images pertaining to the female sportsperson appearing in the print and digital media, sexist and biased? 3) Is the language used by sports journalists and commentators while covering the female sporting events, prejudiced and biased? Research Hypothesis The above mentioned research questions, in a broader sense will be explored and analyzed to test and validate the below...
18 Pages(4500 words)Literature review

Social Networking Sites Impact on Business

Keeping in view the high level of daily usage of social networking sites like Facebook, Twitter, YouTube, Google+ and LinkedIn, companies have taken advantage of them by making ‘pages’ on Facebook which are accessible by the millions of Facebook users. The pages can be thought of as modern yellow page records. Twitter offers a ‘tweet’ option as a message which can be seen automatically on the homepages of those who follow it, and those who don’t follow it can also access them by visiting the company’s twitter profile. These can be used to catch the eyes of followers for new promotions and packages. By using the hashtag option (a # sign followed by a word or phrase) users can come across the comp...
6 Pages(1500 words)Term Paper

Growth Impact of Major Sporting Events

The focus of this research is to, “Critically evaluate the awarding of the Football World Cup hosting to the emerging markets of the world.” The research problem has been formulated with respect to the emerging markets. This has presented a huge scope of research and analysis in the paper. In order to address the research problem, the frequency in how the governing body of international football has awarded the hosting of the Football World Cup to the emerging markets have been reviewed. A background study on the mission, vision, and goals of the international governing body namely Fédération Internationale de Football Association (FIFA) has been carried out (Bob, Swart and Turco, 2006, p.58)....

24 Pages(6000 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The Impact of Sporting Events on Stock Markets for FREE!

Contact Us