FIFA World Cup Match Outcomes and Stock Market Returns
FIFA World Cup Match
Outcomes and Stock
Market Returns
Prepared For: Prof. Jeffery Cao"
!
Prepared By:"
Kara "
Shwe Yee Win (G1089264W)"
Stefanie"
!1
Table of Contents
Abstract"
3"
Introduction"
3"
Motivation and Theoretical Background"
3"
Data Sources and Methodology"
4"
Event Study"
7"
Motivation"
7"
Methodology"
7"
Results and Analysis "
9"
Implications and further analysis"
Regression"
14"
15"
Motivation"
15"
Data Set"
15"
Results and Analysis"
16"
Implications and further analysis"
21"
Limitations"
21"
Conclusion"
22"
References"
23"
Appendix"
24
!2
Abstract!
" Numerous studies have documented how investor sentiment can greatly impact stock returns. Among these studies, some papers have established a strong correlation between the results of soccer matches and investors’ sentiments (Scholtens & Peenstra, 2009); Edmans, Garcia
& Norli, 2007; Kaplanski, & Levy, 2010). Other papers have argued that this effect is either insignificant or undocumented (Gerlach, 2011). Intrigued by this novel relationship, we decided to analyse the results of FIFA matches and the performance of the stock market through methods that were initially unexplored: (1) event study and (2) regression analysis. We analysed 7 World Cup years, consisting of 134 FIFA matches with 24 countries’ historical stock returns. Contrary to most of the prior studies’ findings, our results indicate that there is no strong relation between the results of soccer matches and the stock returns. "
!
Introduction!
"
The subject of sports and its effects on financial markets has received considerable
attention in academic research as an example of how investor sentiment can affect stock market returns (Gerlach, 2011). As soccer has the power to start wars, end wars and explain the world
(Foer, 2004), it’s easy to see how that the outcome of international matches could affect stock market returns. "
!
"
Firstly, we chose the FIFA World Cup for our research as the
Outcomes and Stock
Market Returns
Prepared For: Prof. Jeffery Cao"
!
Prepared By:"
Kara "
Shwe Yee Win (G1089264W)"
Stefanie"
!1
Table of Contents
Abstract"
3"
Introduction"
3"
Motivation and Theoretical Background"
3"
Data Sources and Methodology"
4"
Event Study"
7"
Motivation"
7"
Methodology"
7"
Results and Analysis "
9"
Implications and further analysis"
Regression"
14"
15"
Motivation"
15"
Data Set"
15"
Results and Analysis"
16"
Implications and further analysis"
21"
Limitations"
21"
Conclusion"
22"
References"
23"
Appendix"
24
!2
Abstract!
" Numerous studies have documented how investor sentiment can greatly impact stock returns. Among these studies, some papers have established a strong correlation between the results of soccer matches and investors’ sentiments (Scholtens & Peenstra, 2009); Edmans, Garcia
& Norli, 2007; Kaplanski, & Levy, 2010). Other papers have argued that this effect is either insignificant or undocumented (Gerlach, 2011). Intrigued by this novel relationship, we decided to analyse the results of FIFA matches and the performance of the stock market through methods that were initially unexplored: (1) event study and (2) regression analysis. We analysed 7 World Cup years, consisting of 134 FIFA matches with 24 countries’ historical stock returns. Contrary to most of the prior studies’ findings, our results indicate that there is no strong relation between the results of soccer matches and the stock returns. "
!
Introduction!
"
The subject of sports and its effects on financial markets has received considerable
attention in academic research as an example of how investor sentiment can affect stock market returns (Gerlach, 2011). As soccer has the power to start wars, end wars and explain the world
(Foer, 2004), it’s easy to see how that the outcome of international matches could affect stock market returns. "
!
"
Firstly, we chose the FIFA World Cup for our research as the