The effect of international football results on stock returns

This paper provides an economic rational explanation for the stock market effects of international football results. The researchers utilize the cross-sectional exposure of stocks to individual countries, in order to identify the impact of international football results on returns. Their sample consists of 693 unique football matches, 34 footballing nations and 32 individual European stocks for the period 2002-2012. They find that football results and the exposure of stocks, jointly affect the stock returns in a positive manner. For instance, tournament matches are associated with a next-day stock return of 0.27%. Furthermore, they also provide evidence that surprising football results affect returns and that the results of important matches have more impact on share prices than matches that are less important. This is the first paper to explore any synergistic effects between international football results and the exposure of a stock to the sporting nations, on the corresponding stock returns.