The effect of championship professional sporting events on the returns of locally headquartered companies.

摘要

This paper investigates the impact of the championship-deciding contests of the four major American sports on stock returns of firms headquartered in the home cities of the competing teams. Event-study methodologies are applied to determine if local markets react abnormally during the trading day following a championship win or loss. Results indicate that across all stock exchanges, companies who experienced a prior win or loss do not exhibit any abnormal returns. Even limiting the tested companies to only those traded on the NASDAQ exchange does not reveal any abnormal returns following these events. These results combined with previous findings present a puzzle about when and if investors care about sports. Possible explanations and extensions are offered.