Sport sponsorship announcement and stock returns: a meta-analytic review
International Journal of Sports Marketing and Sponsorship
ISSN: 1464-6668
Article publication date: 17 December 2020
Issue publication date: 14 June 2021
Abstract
Purpose
Given the public availability of secondary data on investments in events such as the Olympics, FIFA World Cup and professional sports, event studies that measure stock market response to these investments have grown. Previous findings are mixed, however, with some studies suggesting that the announcement of sponsorship contracts is a positive event and others finding detrimental effects of the announcement on shareholder value. This study aims to analyze the mixed findings from event studies in sport sponsorship to determine if sponsorship announcements influence stock market response.
Design/methodology/approach
The meta-analysis examines more than 20 years of research on event studies in sponsorship (34 studies).
Findings
The overall results show a positive, but non-significant effect of partnership deal announcements on shareholder wealth. Further analysis considers the effects of sponsorship announcements by each type of event window to see the impact of the announcement relative to time (pre-announcement, announcement day, post-announcement and pre- to post-announcement). This closer examination of the event window shows that stock prices of sponsoring organizations increased in the pre-announcement window.
Originality/value
Quantitative meta-analytic findings indicate that information about sponsorship deals appears to leak to share markets and positively influence share price. This finding suggests that sponsoring the sports and events found in these event studies is seen as value enhancing for sponsoring firms.
Keywords
Acknowledgements
The authors would like to thank Steffen Jahn for editing an earlier draft of this manuscript and four anonymous reviewers from the journal for helpful comments.
Citation
Kwon, Y. and Cornwell, T.B. (2021), "Sport sponsorship announcement and stock returns: a meta-analytic review", International Journal of Sports Marketing and Sponsorship, Vol. 22 No. 3, pp. 608-630. https://doi.org/10.1108/IJSMS-05-2020-0085
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited