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Football Special: The FIFA World Cup, Stock Market Performance and Financial Economics

Fri, 20 Jun 2014 05:56:00 GMT

While threatening to over-shadow the administration of this year's FIFA World Cup, the furore around the alleged rigging of the selection process for 2022 is a handy reminder of the vast sums of money involved in staging and exploiting these Mega Events.

The body of research in Sports Economics has grown considerably over the last 4 years since the last world cup when we first started aggregating the literature, perhaps reflecting a growing awareness of the increasing complexity and impact of these Mega Events. In this selection of links to ePrints (for which we make no claims of completeness!) you'll find a wide range of topics covered from the impact on Markets and Sentiment, through to the effects on the broader economy, on the host nations, on employment, infrastructure and consumer demand. The selection also deals with more general issues around the administration and financial management of Mega-Events and in this context we identify a number of papers critiquing the bidding process, raising timely, important questions about corruption associated with tournaments like this.

As a bonus, we also contacted Professor Guy Kaplanski, head of Financial Studies at Bar Ilan University Business School, who is the author of 2 papers in this selection and kindly answered some of our questions about his research on the impact of World Cup tournaments on the stock market. You can read that interview here.

1. Markets, Trading and Sentiment

Football Tournaments move markets and no Tournament has the power move markets quite like the FIFA World Cup. Who doubts that the big Quant Hedge Funds have been frantically crunching the numbers and building models to exploit the unusual patterns which emerge over the course of tournament? In recent years a body of research has emerged to quantify that effect across numerous vectors, and this collection of ePrints asks questions about the performance of the S&P, the impact of sentiment and intriguingly, investor innattention.

Is There a Correlation Between World Cups and S&P 500 Performance?
Ralph Baddour, TorontoMED

Sports Sentiment and Stock Returns
Alex Edmans, Diego Garcia, Oyvind Norli

Market Impact of International Sporting and Cultural Events
António Miguel Martins and Ana Paula Serra

The Pitch Rather than the Pit: Investor Inattention During FIFA World Cup Matches
Michael Ehrmann and David-Jan Jansen

Sentiment, Irrationality and Market Efficiency: The Case of the 2010 FIFA World Cup
Guy Kaplanski, Haim Levy

Exploitable Predictable Irrationality: The FIFA World Cup Effect on the U.S. Stock Market
Guy Kaplanski and Haim Levy

Seemingly Irrelevant Events Affect Economic Perceptions and Expectations: The FIFA World Cup 2006 as a Natural Experiment
Thomas J. Dohmen, Armin Falk, David Huffman and Uwe Sunde

Financial Instruments with Sports Betting Components: Marketing Gimmick or a Domain for Behavioral Finance?
Wolfgang Breuer, Guido Hauten and Claudia Kreuz

Do Crowds Learn Wisdom? Theory and Evidence from Trading During the World Cup
Christopher Adams


The rising cost of staging Mega-Events, and the subsequent impact on national economies is a topic which is covered in many of these papers which deal with issues as diverse as the prediction of costs and benefits and the impact on employment, tourism, consumer demand and sustainable development.

Predicting the costs and benefits of mega-sporting events: Misjudgement of Olympic Proportions (pdf)
Jonathan Barclay

Mega Sporting Events and Legacy: The Case of the 2014 World Cup (pdf)
Airton Saboya Valente Junior.and Joan Noguera

Mega-sporting events in developing nations - Playing the way to prosperity? (pdf)
Victor A. Matheson and Robert A. Baade

One Year Later: A Re-Appraisal of the Economics of the 2006 Soccer World Cup
Wolfgang Maennig

Impact of Overwhelming Joy on Consumer Demand: The Case of a Soccer World-Cup Victory
Jean-Marc Falter, Christophe Perignon, Olivier Vercruysse

Event Seizure: The World Cup 2018 and Russia’s Illusive Quest for Modernisation
Martin Müller

South Africa 2010: Economic Scope and Limits
Swantje Allmers and Wolfgang Maennig

Economic and Fiscal Effects of the 2006 FIFA World Cup in Germany
The Case of the World Cup Games in Munich - Alina M. Popescu and Peter Friedrich

Globalization and Goals: Does Soccer Show the Way?
Branko Milanovic

Economic Impacts of the FIFA Soccer World Cups in France 1998, Germany 2006, and Outlook for South Africa 2010
Swantje Allmers and Wolfgang Maennig

Investment in Stadia and Regional Economic Development - Evidence from FIFA World Cup 2006
Arne Feddersen, André Grötzinger and Wolfgang Maennig

The 2010 World Cup High-Frequency Data Economics: Effects on International Awareness and (Self-Defeating) Tourism
Wolfgang Maennig, Stan Du Plessis

Euro 2012 vs. Sustainable Development
Zbigniew Karaczun

Large Sport Events and Unemployment: The Case of the 2006 Soccer World Cup in Germany -
Florian Hagn and Wolfgang Maennig

The Flexibility of the Workweek in the United States: Evidence from the FIFA World Cup -
Fernando A. Lozano

Labour Market Effects of the 2006 Soccer World Cup in Germany
Florian Hagn and Wolfgang Maennig

Employment Effects of the Football World Cup 1974 in Germany
Florian Hagn and Wolfgang Maennig

Mega-Sporting Events as Experience Goods
Malte Heyne, Bernd Suessmuth and Wolfgang Maennig


The corruption allegations levelled at FIFA in recent days regarding the bidding process for the 2022 World Cup in Qatar re-open a whole can of worms related to the bidding process for Mega-Events, and more generally the administration and governance of international sporting bodies like FIFA. This collection of papers deal directly with allegations related to the 2026 bidding process, and more generally best practice in bidding processes and the management of Mega-Events.

World Cup 2026 Now Accepting Bribes: A Fundamental Transformation of FIFA's World Cup Bid Process
Ryan Becker

Improving the Bidding Process for International Sporting Events
Ryan Gauthier

Bidding for Sport Mega-Events
John K. Wilson, Bernhard Lobmayr, Richard Pomfret

Rethinking the FIFA World Cup Final Draw
Julien Guyon, Bloomberg L.P.

Legal Determinants of World Cup Success
Mark D. West

The Seven Deadly Sins of Mega-Event Planning - And What to Do About Them
Martin Müller

FIFA World Cup 2010: An Analytical Study of the Effectiveness of South African Intellectual Property Regime to Combat Ambush Marketing and Counterfeiting
Aparna Watal

The Feel-Good Effect at Mega Sport Events - Recommendations for Public and Private Administration Informed by the Experience of the FIFA World Cup 2006
Marcel Porsche and Wolfgang Maennig

Ambush Marketing in Poland Before the 2012 European Football Championship
Marcin Gebarowski


Which Team Will Win the 2014 FIFA World Cup? A Bayesian Approach for Dummies
Andres Ramirez Hassan and Johnatan Cardona Jimenez,

Ten Do It Better, Do They? An Empirical Analysis of an Old Football Myth
Marco Caliendo and Dubravko Radic

The Penalty-Duel and Institutional Design: Is There a Neeskens-Effect? -
Wolfgang Leininger, Axel Ockenfels

Football Most Foul
William A. Birdthistle

Winning by Losing: Incentive Incompatibility in Multiple Qualifiers
Dmitry Dagaev and Konstantin Sonin

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