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Stock market reaction to affiliated sports teams’ performance: evidence from China

Yongqiang Gao (School of Management, Huazhong University of Science and Technology, Wuhan, China)
Yingli Wang (School of Management, Huazhong University of Science and Technology, Wuhan, China)
Taïeb Hafsi (HEC, University of Montreal, Montreal, Canada)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 1 July 2022

Issue publication date: 22 June 2023

313

Abstract

Purpose

Drawing on the affect transfer and stakeholder theories, this study aims to examine how the performance of a sports team that a firm owns or sponsors may affect the firm’s market value. It explicates that a sports team wins (loses) in the field raises the public’s positive (negative) affect, which can spill over to the associated firm.

Design/methodology/approach

Based on a sample of publicly listed firms in Chinese stock exchanges that are owners or sponsors of soccer teams that competed in the National soccer league of China during 2004–2017, the authors find good support for the hypotheses.

Findings

The findings reveal that a firm’s cumulative abnormal return is positively related to its soccer team’s winning and negatively related to the team’s losing, and these relationships are moderated by both firm and match characteristics. By showing a relationship between sports team’s performance and associated firm’s market value, executives need cautions when their firms want to own or sponsor sports team. However, owned sports team’s winning could be a good strategy to improve a firm’s market value.

Originality/value

This study enriches the spillover literature and deepens the understanding of spillover effect. It provides evidence for the concept of affect transfer and broadens its application scope.

Keywords

Acknowledgements

The authors are grateful to the financial support of the National Natural Science Foundation of China (NSFC) (No. 71772071).

Citation

Gao, Y., Wang, Y. and Hafsi, T. (2023), "Stock market reaction to affiliated sports teams’ performance: evidence from China", Chinese Management Studies, Vol. 17 No. 4, pp. 787-807. https://doi.org/10.1108/CMS-06-2021-0262

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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