When it rains, it pours : losses on football fields finding their ways into stock markets

Abstract

Football has been a subject of interest to economists and other researches for decades. Most of this research treats football match outcomes as the dependent variables, trying to predict the said outcome. This paper takes those outcomes as independent variables. The aim is to understand whether or not the results of international football matches between national teams have an impact on the playing countries’ stock markets. Prior research is inconclusive. While some point out volumes of trade and even returns are affected, others deem the markets efficient and irresponsive to football matches. This paper’s main conclusion is that the French stock market index CAC-40 was affected by the performance of the France national football team, namely, on the trading days following the national team’s loss the CAC-40 index trailed behind the FTSE AW01 all-world average stock index by -0.22% (percentage points).