Abstract

We examine the relationship between NCAA basketball end-of-season tournament (“March Madness”) results and stock returns of firms located in the vicinity of competing teams’ campuses. We find that stocks of firms located around expected winners (higher ranked teams) perform poorly if the team unexpectedly loses. For example, an upset loss leads to abnormal stock returns of -41 basis points. The decline following all basketball losses is also significant but investors punish unexpected losses more. These results, associated with upsets persist and intensify with riskier stocks, more important games and closer distance. The returns around winning universities are found to be less significant.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.