What is the value of corporate sponsorship in sports?

Narayan, P K and Rath, Badri Narayan and K P, Prabheesh (2016) What is the value of corporate sponsorship in sports? Emerging Markets Review, 26. pp. 20-33. ISSN 1566-0141

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This paper investigates the stock market reaction to investor mood swings resulting from the Indian Premier League (IPL) cricket matches. We find that stocks listed on the Bombay Stock Exchange (BSE) that sponsor the IPL cricket are unaffected by the cricket matches. This finding is robust along two lines: (a) the effect is insignificant both statistically and economically which we demonstrate using a simple trading strategy; and (b) results hold across a wide range of portfolios. Our results, both statistical and trading strategy-based, suggest that the portfolios of companies that sponsor cricket in India are efficient. Our findings stand in sharp contrast to the evidence obtained by the broader sports literature suggesting that sports actually impact stock returns, driven principally by psychological factors.

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IITH Creators:
IITH CreatorsORCiD
Rath, Badri Narayanhttp://orcid.org/0000-0001-7211-0952
Item Type: Article
Uncontrolled Keywords: Stock market; Cricket; Trading strategy; Profits
Subjects: Social sciences > Business Finance
Social sciences > Social Sciences Mathematical Methods
Divisions: Department of Liberal Arts
Depositing User: Team Library
Date Deposited: 17 Mar 2016 04:54
Last Modified: 11 Sep 2017 06:55
URI: http://raiith.iith.ac.in/id/eprint/2240
Publisher URL: https://doi.org/10.1016/j.ememar.2016.02.003
OA policy: http://www.sherpa.ac.uk/romeo/issn/1566-0141/
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