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Sport and emerging capital markets: market reaction to the 2022 World Cup announcement

Sport and emerging capital markets: market reaction to the 2022 World Cup announcement Purpose – The purpose of this paper is to examine how the announcement of the mega sport event of the 2022 FIFA World Cup affected the stock market return and volatility for the hosting country (Qatar) and other economically related countries (United Arab of Emirates, Bahrain, Kuwait, Saudi Arabia and Oman). Design/methodology/approach – The paper includes empirical analysis in which data from the Qatar Stock Market as well as a sample of economically connected markets are collected for the period of 2010 and 2011 and analyzed to examine if mega sport events influence stock market return and volatility. Two testing methodologies are used in this study, event study as well as GARCH and EGARCH models. Additionally, sector effect is considered to examine if mega events can affect sectors' returns in different levels. Findings – The study found evidence of abnormal market return in the hosting country; in particular, the service sector is the most affected sector. However, it failed to find any evidence of abnormal return for the rest of selected Gulf Cooperation Council (GCC) countries. On the other hand, no significant volatility effects were found. Originality/value – This paper's originality lies in suggesting that policy makers in small economies expecting to host mega events need to work more seriously to promote investments and attract funds from investors and consumers to be able to reap the benefits out of these events – which should exceed the pay associated with improving the infrastructure of less developed markets. Given that Qatar, as well as most of the GCC countries, is planning to diversify their future income, sport may improve the country's reputation and attract external investments to the country. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Islamic and Middle Eastern Finance and Management Emerald Publishing

Sport and emerging capital markets: market reaction to the 2022 World Cup announcement

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Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8394
DOI
10.1108/17538391311329824
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine how the announcement of the mega sport event of the 2022 FIFA World Cup affected the stock market return and volatility for the hosting country (Qatar) and other economically related countries (United Arab of Emirates, Bahrain, Kuwait, Saudi Arabia and Oman). Design/methodology/approach – The paper includes empirical analysis in which data from the Qatar Stock Market as well as a sample of economically connected markets are collected for the period of 2010 and 2011 and analyzed to examine if mega sport events influence stock market return and volatility. Two testing methodologies are used in this study, event study as well as GARCH and EGARCH models. Additionally, sector effect is considered to examine if mega events can affect sectors' returns in different levels. Findings – The study found evidence of abnormal market return in the hosting country; in particular, the service sector is the most affected sector. However, it failed to find any evidence of abnormal return for the rest of selected Gulf Cooperation Council (GCC) countries. On the other hand, no significant volatility effects were found. Originality/value – This paper's originality lies in suggesting that policy makers in small economies expecting to host mega events need to work more seriously to promote investments and attract funds from investors and consumers to be able to reap the benefits out of these events – which should exceed the pay associated with improving the infrastructure of less developed markets. Given that Qatar, as well as most of the GCC countries, is planning to diversify their future income, sport may improve the country's reputation and attract external investments to the country.

Journal

International Journal of Islamic and Middle Eastern Finance and ManagementEmerald Publishing

Published: Jun 14, 2013

Keywords: Mega sport event; Qatar; World cup; Event study; GARCH; EGARCH; Football

References