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hosting the 1996 Summer Olympics Games. The
short-term economic impacts were composed of
direct, indirect, induced and total impact. The
direct impacts involved the expenditure on indus-
tries such as the expenditure on broadcasting
equipment for international broadcasters. They
concluded that there was about US$1.2 billion
direct spending during the year of 1991 to 1997.
The indirect economic impacts were associated
with visitor spending. There was about US$823
million indirect spending by visitors in the 18 days
prior to the 1996 Summer Olympic commenced.
An earlier study by Kim Rhee, Yu, Koo, and Hong
(1989) summarized that there was about 2,382 bil-
lion Korean won (US$2.33 billion) invested into
Olympic related projects. Moreover, there were
about 336,000 jobs opportunities created during
year 1982 to 1988. The most impacts of invest-
ments were in the infrastructure industry with a
38.8 percent increase followed by the manufactur-
ing industry with a 35 percent increase and then the
construction industry with a 32.4 percent increase.
In a recent study, Tziralis, G., Tolis, A., Tatsi-
opoulos, I., and Aravossis (2006) stated that the
Olympics impacted Attica's economy by increasing
the labor force with extra employment opportunity
and an increased expansion of road networks and
improved of existing roads. Moreover, the Games
also resulted in the growth of the constructions
sectors, hotels and restaurants in a scale larger
than the overall growth of the national economy.
Martins and Serra (2007) studied the market
reaction to the announcement of the selected
country hosting the Summer Olympic Games and
Winter Olympic Games, the World Football Cup,
the European Football Cup and World specialized
exhibition. They concluded no evidence support-
ing that industries were more likely to extract direct
benefit from the events, and there are insignificant
cumulative abnormal returns for losing bidders.
Another related study by Willner (1988) exam-
ined the impact on the macroeconomic variable
Gross Domestic Product (GDP) on the 1998 Seoul
Summer Olympics Games by using the ordinary
least squares (OLS) model. He found that there
was a positive and significant relationship between
Olympics and economic growth and investment
growth with slightly higher tourist and investment
activities in the Olympics year.
Dick and Wang (2008) examined the stock mar-
ket reactions to the announcement of the Olympics
Games host cities during the last three decades.
They found a significant and positive announce-
ment effect of hosting the Summer Olympics
Games which was reflected in the returns (addi-
tional two percent accumulated over the following
days). They did not find any significant results for
the Winter Olympics Games.
Mirman and Sharma (2010) investigated the
stock market impact for the year 1996 to 2010
Olympic Games by comparing the stock mar-
ket reaction of winners and losers around the
announcement date. They revealed the Winter
Games announcement, stock markets in winning
countries performs significantly worse than in los-
ing countries, while there are insignificant results
for the Summer Games.
In the latest article “Commonwealth Games and
the Economy” published by Institute International
Trade, India, the research analyst Shradha (2010)
pointed out that the Commonwealth Games 2010
in India expected to result in an overall economic
impact of USD 4.9 billion on India's GDP during
a period of four years starting from 2008 and end-
ing 2012, and created employment opportunities
for approximately 2.5 million people.
3
DATA AND METHODOLOGY
3.1
Data collection
The data used for this study were categorized into
two sets. The first set of data was the daily clos-
ing prices for S&P 500 (Standard & Poor 500) and
those bid winning countries' index of an event, such
as FTSE100 (London), KOPSI 100 Index (Korea),
NYSE (New York, USA), TOPIX (Japan), S&P/
TSE (Canada), Madrid SE (Spain), S&P/ASX200
(Australia), RTS (Russia), Milan COMIT (Italy),
SBF 250 (France), ATHEX Composite Index
(Greece), SSE Composite (Shanghai, China),
IBOVESPA (Brazil), OSLO (Norway), DAX 30
(Germany), FTSE/JSE (South Africa), NZX 50
Index (New Zealand), KLCI (Malaysia), S&P BSE
SENSEX (India), OMXS30 (Sweden), BEL20
(Belgium), PSI20 (Portugal), ATX (Austria), SMI
(Switzerland) and WIG (Poland). These set of data
was obtained from Thomson Data Stream.
The second set of data consisted of international
sporting events announcement date and event
starting date from the event organizers such as
summer and winter Olympics International Com-
mittee, FIFA World Cup, Commonwealth Games
Federation and European Football Association.
The actual events and the hosting countries are
listed in Appendix A. These are international sport-
ing events held globally, and only 30 international
sporting events from the five major games were
selected for this study after the screening process.
3.2
Event study approach
This study utilized the event study approach to
identify the impacts of the international sporting
events on hosting country stock market's move-
ment or behavior. This approach is the most
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