The 2004 Olympic Games announcement and its effect on the Athens and Milan stock exchanges

Veraros, Nikolaos, Kasimati, Evangelia and Dawson, Peter (2004) The 2004 Olympic Games announcement and its effect on the Athens and Milan stock exchanges. Applied Economics Letters, 11 (12). pp. 749-753. ISSN 1350-4851

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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.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Behavioural Economics
Faculty of Social Sciences > Research Groups > Applied Econometrics And Finance
Depositing User: LivePure Connector
Date Deposited: 03 May 2019 10:30
Last Modified: 22 Oct 2022 04:43
DOI: 10.1080/1350485042000254584

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