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The Economic Impact of Olympic Games: Evidence from Stock Markets


Christian David Dick


Centre for European Economic Research (ZEW)

Qingwei Wang


Bangor Business School; Centre for European Economic Research (ZEW)

August 2008

ZEW - Centre for European Economic Research Discussion Paper No. 08-060

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.

Number of Pages in PDF File: 14

Keywords: Olympic Games, economic impact, event study, stock markets

JEL Classification: L83, G14

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Date posted: September 1, 2008  

Suggested Citation

Dick, Christian David and Wang, Qingwei, The Economic Impact of Olympic Games: Evidence from Stock Markets (August 2008). ZEW - Centre for European Economic Research Discussion Paper No. 08-060. Available at SSRN: http://ssrn.com/abstract=1261856 or http://dx.doi.org/10.2139/ssrn.1261856

Contact Information

Christian David Dick (Contact Author)
Centre for European Economic Research (ZEW) ( email )
P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
Qingwei Wang
Bangor Business School ( email )
Bangor Business School
College Road
Gwynedd LL57 2DG, Wales LL57 2DG
United Kingdom
Centre for European Economic Research (ZEW) ( email )
P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
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