The Olympic Candidature Process: the effect of IOC announcements on bidders’ stock exchanges

In this paper we examine the effect of arguably the world’s largest consistent, non-economic event, the Olympic Games, on the economy. More specifically, through an event study methodology we test the hypotheses that announcements that increase the probability of winning have a positive effect on stock indices and specific industries. This paper focuses on the three most recently announced Olympic Games: 2020, 2024 & 2028. We find significant effects of the different announcements for all countries except the United States, which has the largest economy in the world by far. These significant effects exist for both short-term and long-term, for stock indices and specific industries, in every step of the bidding process that we examined. However, the sign of the effects does not follow economic intuition blindly and seems more complicated to predict than our one-size-fits-all approach hoped for.