The financial dynamics of major sporting events : a case study approach

Abstract

Mega sporting events like the Olympics and the FIFA World Cup are among the most viewed spectacles in the global economy. They are frequently justified in terms of economic rewards, with host countries expecting increases in Gross Domestic Product (GDP), Foreign Direct Investment (FDI), and international tourism. However, the extent to which these expectations are met remains debatable. This thesis examines the financial dynamics of mega sporting events using a multi-method empirical approach that includes a stock market event study, a Difference-in-Differences (DiD) framework and a panel regression analysis. The event research evaluates stock market reactions in six host nations throughout both the announcement and event timeframes. The findings demonstrate short-lived abnormal returns, which are the strongest at the time of announcement (particularly in Brazil 2014), but weak or negative during the events themselves. The data suggest that markets react more to new information about hosting than to Games or tournaments that have already begun. The DiD research examines GDP, FDI, and tourist arrivals for six hosts: Sydney (2000), Beijing (2008), South Africa (2010), London (2012), Brazil (2014), and Russia (2018). The outcomes are quite uneven with Beijing seeing GDP and FDI gains, whereas South Africa and Brazil seeing reductions in the same aspects. Tourism outcomes are uneven, with increases in some cases and crowding-out impacts in others. Finally, the panel regression study of both the host and non-host nations reveals no systematic evidence of GDP growth impacts during host years or following periods. The cumulative hosting variable suggests that frequent hosting might degrade long-term performance. Overall, the data show that, while mega sporting events may provide symbolic significance and occasional short-term advantages, they are not reliable drivers of national economic growth. This thesis adds to the literature by conducting a comprehensive, multi-model assessment of mega event consequences and making policy suggestions for a more cautious and strategically integrated approach to hosting.