The 2000 and 2008 Olympic Games Announcements and Chinese Stock Market Responses
Abstract
Beijing attempted to host both the 2000 and 2008 Olympic Games, being unsuccessful in 2000 and successful in 2008. This paper analyzes the influences the Olympic host announcements on Chinese stock market indices. Olympic host announcements may impact the bidding countries’ investors’ sentiments (mood effect) and their rational economic expectations (economic effect), thus, the bidding countries’ stock market returns may be affected. Employing event study analysis, this paper first differentiates the mood effect from the economic effect on the Chinese stock market indices, and then demonstrates that a negative economic effect is likely to be associated with hosting the Olympic Games. The findings of this paper will be useful to decision makers in cities considering the possibility of hosting future Olympic Games.