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The 2004 Olympic Games Announcement and Its Effect on the Athens and Milan Stock Exchanges


Reference:

Veraros, N., Kasimati, E. and Dawson, P., 2004. The 2004 Olympic Games Announcement and Its Effect on the Athens and Milan Stock Exchanges. Applied Economics Letters, 11 (12), pp. 749-53.

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Abstract

Through an event study methodology, the effect of the nomination of Athens as the hosting city for the Olympics of 2004 on the stock exchanges of Greece (winner) and Italy (loser), the two primary candidates for the Games is examined. Academic literature suggests that sporting mega events have a positive contribution to the host area economy. This implies that the stock exchange should react positively to the announcement of such events. Berman et al. (2000), in a similar study on the announcement of the Sydney 2000 Olympics, found no significant effect on the overall market and only limited effect on infrastructure-related companies based in the specific area hosting the Games. This study reveals a significantly positive effect on the Athens Stock Exchange (ASE) as a whole, as well as on infrastructure-related industries. No significant effect was identified on the Milan Stock Exchange (MSE). The differences in the impact of the announcement to economy size differences between the two countries and to the assessment is attributed to the fact that due to the highly competitive nature of the bidding process the financial markets assign higher probability to losing instead of winning.

Details

Item Type Articles
CreatorsVeraros, N., Kasimati, E. and Dawson, P.
Uncontrolled Keywordsasset pricing, recreation, gambling, tourism (l830), trading volume, event studies (g140), information and market efficiency, bond interest rates (g120), sports
DepartmentsFaculty of Humanities & Social Sciences > Social & Policy Sciences
Faculty of Humanities & Social Sciences > Economics
RefereedYes
StatusPublished
ID Code9999

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