How Much is a Goal in the Football Championship Worth? Match Results and Stock Price Reaction

Abstract

In the past many researchers have argued that psychological factors influence stock returns. In this paper, we try to show the relationship between the outcome of football events and stock returns, based on the thesis that sports results affect investors’sentiment. We analyzed stock price performance indicators and football results, by taking 25 Soccer Listed Companies into account. The most extensive database ever used (11,977 matches) has been considered. It includes football results in the National Championship, National Cup and Continental Cups, in the period between the 2003/2004 and the 2014/2015 season. The analysis shows the economic and significant statistical effects on stock prices irrespective of the final results of the matches. This conclusion is valid for all analysed countries and competition type. We also show that stock market reaction is larger in some local markets than in others. Moreover, we examine the relationship between the number of goals scored and league stages effects, finding meaningful evidence of behavioural finance on investment decision-making processes.