Graduation Year

2015

Date of Submission

12-2014

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Richard Burdekin

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© 2014 MJ Min Jun Kim

Abstract

This event study analyzes the share price reactions of the owning corporation investors in relation to the Chinese and Korean football clubs' success. Guangzhou Evergrande FC, Beijing Guoan FC, Jeonbuk Hyundai Motors FC, and Pohang Steelers FC are examined which are owned by Evergrande Group, CITIC Group, Hyundai Motors Company, and POSCO Group, respectively. It is assumed that successful events of the football clubs such as winning championships and major players and head coach acquisitions will have a positive boost to the daily returns of the owning corporations. The results are strongest for Pohang Steelers FC but other football clubs also suggest similar trends. The findings offer some tangible support for the assumption that the recent global arms race in transfer spending by football clubs can create value for the owners and suggest that the investments may lead to positive returns.

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