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The Sydney Olympic Games announcement and Australian stock market reaction

Author

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  • Gabrielle Berman
  • Robert Brooks
  • Sinclair Davidson

Abstract

On 23 September 1993 the International Olympic Committee announced that Sydney would host the 2000 Olympic Games. Given the keen competition between rival cities bidding for the Olympics it could be argued that the winning city anticipates economic benefits to accrue from hosting the games. To the extent that this is valid, some stock market reaction may be found to the Olympic announcement. Testing the hypothesis for Australia the following results are found. First no overall impact on the stock market is found. Second, only a limited number of industries portfolios show a significant positive impact to the Olympic games announcement. Specifically the industry portfolios are: building materials, developers and contracts, engineering and miscellaneous services. This is consistent with the economic boost for the Olympics being in infrastructure and development and thus in the general building and construction sector. Third the results clearly demonstrate that for the industries where there was a significant positive stock market reaction to the Olympic Games announcement, that significant positive stock market reaction is confined to stocks based in the state which will host the games, New South Wales.

Suggested Citation

  • Gabrielle Berman & Robert Brooks & Sinclair Davidson, 2000. "The Sydney Olympic Games announcement and Australian stock market reaction," Applied Economics Letters, Taylor & Francis Journals, vol. 7(12), pages 781-784.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:12:p:781-784
    DOI: 10.1080/135048500444796
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    Cited by:

    1. Christian David Dick & Qingwei Wang, 2010. "The economic impact of the Olympic Games: evidence from stock markets," Applied Economics Letters, Taylor & Francis Journals, vol. 17(9), pages 861-864.
    2. Mandel Philipp & Süssmuth Bernd, 2015. "Public Education, Accountability, and Yardstick Competition in a Federal System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1679-1703, October.
    3. Dwipraptono Agus Harjito & Md. Mahmudul Alam & Rani Ayu Kusuma Dewi, 2021. "Impacts of International Sports Events on the Stock Market: Evidence from the Announcement of the 18th Asian Games and 30th Southeast Asian Games," Post-Print hal-03538176, HAL.
    4. Yu, Tiffany Hui-Kuang & Huarng, Kun-Huang, 2020. "A new event study method to forecast stock returns: The case of Facebook," Journal of Business Research, Elsevier, vol. 115(C), pages 317-321.
    5. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "EEAG Report on the European Economy 2007," EEAG Report on the European Economy, CESifo, vol. 0, pages 1-156, February.
    6. Huei-Fu Lu & Tien-Tze Chen, 2016. "The Impact of Match-Fixing Scandals on the Stock Returns of Parent Companies and Sponsors: Evidence from Chinese Professional Baseball League In Taiwan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(4), pages 172-189, April.
    7. Amélie Charles & Olivier Darné, 2016. "Stock market reactions to FIFA World Cup announcements: An event study," Economics Bulletin, AccessEcon, vol. 36(4), pages 2028-2036.
    8. Krystian M. Zawadzki & Marcin Potrykus, 2023. "Stock Markets’ Reactions to the Announcement of the Hosts. An Event Study in the Analysis of Large Sporting Events in the Years 1976–2032," Journal of Sports Economics, , vol. 24(6), pages 759-800, August.
    9. António Martins & Ana Serra, 2011. "Market impact of international sporting and cultural events," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 35(4), pages 382-416, October.
    10. Corinne Sullivan & Michael A. Leeds, 2016. "Will the games pay? An event analysis of the 2020 summer Olympics announcement on stock markets in Japan, Spain, and Turkey," Applied Economics Letters, Taylor & Francis Journals, vol. 23(12), pages 880-883, August.
    11. Ogawa, Ryoh, 2017. "Using REIT Data to Assess the Economic Worth of Mega-Events: The Case of the 2020 Tokyo Olympics," MPRA Paper 78829, University Library of Munich, Germany.
    12. Bitzenis, Aristidis & Tsitouras, Antonis & Vlachos, Vasileios A., 2009. "Decisive FDI obstacles as an explanatory reason for limited FDI inflows in an EMU member state: The case of Greece," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(4), pages 691-704, August.
    13. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Seppo Honkapohja & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2007. "Chapter 6: Economic nationalism," EEAG Report on the European Economy, CESifo, vol. 0, pages 133-147, February.
    14. Julie Clark & Ade Kearns, 2016. "Going for gold: A prospective assessment of the economic impacts of the Commonwealth Games 2014 on the East End of Glasgow," Environment and Planning C, , vol. 34(8), pages 1474-1500, December.
    15. Rodolfo Aquino, 2006. "Efficiency of the Philippine stock market," Applied Economics Letters, Taylor & Francis Journals, vol. 13(7), pages 463-470.
    16. Seung-Jin Han & Won-Jae Lee & So-Hee Kim & Sang-Hoon Yoon & Won Shick Ryu & Hyunwoong Pyun & Daehwan Kim, 2022. "Effects of the Olympic Announcement and the Actual Event on Property Values: The Case of the 2018 PyeongChang Winter Olympic Games," Sustainability, MDPI, vol. 14(14), pages 1-16, July.
    17. Dennis Coates & Brad R. Humphreys, 2008. "The Effect of On-Field Success on Stock Prices: Evidence from Nippon Professional Baseball," Working Papers 0805, International Association of Sports Economists;North American Association of Sports Economists.
    18. Refai, Hisham Al & Eissa, Mohamed Abdelaziz, 2017. "The impact of FIFA’s official announcements on the stock market of Qatar: The case of the 2022 World Cup," Research in International Business and Finance, Elsevier, vol. 41(C), pages 347-353.
    19. Mishra, Vinod & Smyth, Russell, 2010. "An examination of the impact of India's performance in one-day cricket internationals on the Indian stock market," Pacific-Basin Finance Journal, Elsevier, vol. 18(3), pages 319-334, June.
    20. Zawadzki, Krystian, 2013. "The impact of mega sports events on the stock markets," MPRA Paper 44467, University Library of Munich, Germany.
    21. Chernin Yulia & Lahav Yaron, 2014. "“The People Demand Social Justice”A Case Study on the Impact of Protests on Financial Markets," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 4(2), pages 99-121, July.
    22. Nikolaos Veraros & Evangelia Kasimati & Peter Dawson, 2004. "The 2004 Olympic Games announcement and its effect on the Athens and Milan stock exchanges," Applied Economics Letters, Taylor & Francis Journals, vol. 11(12), pages 749-753.

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