Do stock markets react to soccer games? A meta-regression analysis

This study applies meta-regression analysis to aggregate a sample of 1126 empirical estimates of the stock market reaction to soccer matches collected from 37 primary studies. Our results indicate that winning a match is not associated with significant return effects for both national teams and indi...

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Bibliographic Details
Published in:Applied economics 2018-04, Vol.50 (19), p.2171-2189
Main Authors: Geyer-Klingeberg, Jerome, Hang, Markus, Walter, Matthias, Rathgeber, Andreas
Format: Article
Language:English
Subjects:
Bias
Clubs
Economic analysis
Economic theory
Football
Games
Meta-analysis
publication bias
Rates of return
Regional variations
Regression analysis
Securities markets
Soccer
Sports
sports sentiment
Stock exchanges
stock returns
Teams
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Summary:This study applies meta-regression analysis to aggregate a sample of 1126 empirical estimates of the stock market reaction to soccer matches collected from 37 primary studies. Our results indicate that winning a match is not associated with significant return effects for both national teams and individual clubs. In the case of lost matches, we find strong evidence for publication bias, i.e. negative returns are systematically overrepresented causing a biased picture of the true soccer match effect. After correcting for this bias, the mean return after losses by national teams becomes statistically insignificant and accounts for only basis points. In the case of individual clubs, the corrected impact of a loss is a significant basis points effect. In a further analysis, we identify various aspects of study design like regional differences, time period under examination and the design of empirical analysis to be responsible for the wide variation in previous study outcomes. Overall, our findings provide evidence against the hypothesis that stock markets are driven by sports sentiment in the case of national teams. Due to the existence of strong asymmetry in the returns after wins and losses of individual clubs, behavioural explanations cannot be fully ruled out.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2017.1392002