An Empirical Study Of Sports Results Influence On Stock Returns In China

This paper investigates the stock market reaction to sudden changes in investor mood. Motivated by psychological evidence of a strong link between soccer outcomes and mood,the study uses international soccer results as primary mood variable.This study examines the impact of sports results on investor sentiment and stock returns. Using the results of four kinds of international football games in which the Chinese Men’s National Soccer Team competed between 1991 and 2015,the paper tracks the Shanghai Stock Exchange composite index return during a certain football game and find that returns during the Games are positively related to the football team’s good performance while negatively related to the football team’s bad performance.Besides, the paper describes the important games and the critical games and investigates their impact on the stock return separately. The result indicates that the important games and the critical games have a more significant impact on the stock returns, which is consistent with the previous results.In addition, the paper studies the stock returns of five listed companies which are related with sports especially football games. By doing the empirical research and significant test, the main conclusions are as follows:When investigating separately for each individual event’ impact on the stock returns of the five listed companies, there exist some abnormal returns and the result shows a certain degree of significance. And the degree of significance varies with the different characteristics of the listed companies such as the size, the main business type and the relevance of the football concept.Besides, the scope and scale, degree of difficulty and event duration of the sports event also differentiated.When constructing a “wins match combination”and “loses game combination” and studying their respective results’ impact on the stock returns of the five listed companies, there also are some abnormal returns. But only the “loses game combination” has a stastic significance of negative effect while the wining combination doesn’t show a significant positive effect.