Graduation Year

2024

Date of Submission

4-2024

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Eric Hughson

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© 2024 Jenna R Rempel

Abstract

Typically 7 years in advance of the Summer Olympics the host city is announced, providing the opportunity for economic benefits for companies in close proximity. These benefits should be reflected in the stock market upon announcement; however, the degree of surprise varies on the announcement date. In some instances, the announcement of the host city is unexpected, while with others it is known beforehand. Using event study methodology, this study looks at the announcement dates for all Summer Olympics 2004 and onwards, specifically seeing if companies headquartered in these cities experience abnormal returns. This study then analyzes these returns by industry to see if Olympic-exposed industries such as construction, hospitality, or transportation experience higher returns. Since the degree of surprise varies, even if there are anticipated economic benefits, an event study will only recognize abnormal returns if the event is unanticipated. This study finds abnormal returns for host cities that unexpectedly won the bid (Athens, London, Tokyo), and finds the aggregate effect size and impacted industries to vary by city.

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