Tech UPTechnologyThe World effect: does the economy of the countries...

The World effect: does the economy of the countries that win the final improve?

Win the soccer World Cup. A sporting feat that brightens our day, destroys grenades, depletes flags and face paints in stores … But, apart from the rush, does it have a real and lasting effect on the economy of the country that lifts the FIFA trophy ?

The investigations that have been based on the activity of the markets and the stock prices are not conclusive: beyond the increase of merchandising articles – shirts, balls … – related to the colors of the winning team or the increase in the amount of rights for televising the games, no measurable effect has been recorded . Not even the foreseeable improvement in investors’ mood – what is known as the “sports sentiment hypothesis” – seems to be contagious to the movements of listed companies, as pointed out by a meta-analysis of several studies carried out in 2017.


This is one of the conclusions drawn by researchers Juan L. Nicolau and Abhinav Sharma, from the Pamplin School of Business at Virginia Tech University, when reviewing the scientific literature on the subject, as can be read in the Tourism Management magazine .

What has been appreciated, as Nicolau himself observed years ago, is that the maximum football victory can give a boost to tourism in the winning country. Or, at least, that happened to Spain in 2010: Iniesta’s goal in the 116th minute revalued our brand in the market. It sounded more familiar to people –in the first place, because the country is called the same as the national team–, which influenced them when choosing a destination for their vacations. But has it happened in other editions of the championship?

Spain is different

Nicolau and Sharma have focused on the daily earnings of tourist company stocks on the stock market, especially hotel chains and airlines , based on the Bloomberg database. Specifically, they analyzed the movements –the day of the final, the two days before and two days after– registered in six companies in France after winning their selection in 1998; four from Italy (2006); four from Spain (2010), and five from Germany, which won the victory in 2014. The Brazilian case could not be evaluated because, in 2002, no tourism company in that country was listed on the stock market.

The results do not admit any doubt: the prices did not undergo an abnormal change – only a very slight increase on the same day of the event – that could be attributed to the match … except, as we already knew, in 2010. And why is the exception due? Spanish? The authors of the work ignore it, since the other countries studied – France and Italy, in particular – are also powerful tourist destinations. Nicolau and Sharma suggest expanding the research to the clubs and assessing the economic impact of their sporting triumphs in the regions where the cities they represent are located.

More information: Juan L. Nicolau and Abhinav Sharma. “A generalization of the FIFA World Cup Effect”. Tourism Management.


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