This paper examines the short and long term effects of the Summer Olympics, Winter Olympics,
and the World Cup on the economy of the hosting country. We find that the immediate effect of
such an announcement on equity market returns is statistically insignificant, with the
construction industry being the only exception. We further show that mega sports events
generally fail to provide significant positive long-term stock market performance to the hosting
country. We do however find that the Summer Olympic game hosting nations generate
significant positive economic performance up to 3 years prior to hosting the event, while this
positive economic performance disappear after 1 year of the hosting the Summer Olympic game.
Our results suggest that unlike the common claims of mega sports organizers, it appears that
there are no significant long-run economic gains from hosting any of the three mega sporting
events.
