Abstract
This paper investigates the stock market reaction to a change in investor mood following the Eurovision Song Contest—an annual international song competition and one of the most watched non-sporting events globally. Contrary to existing literature on international competitions, we find a positive swing in investor sentiment in the winning country. The elevated atmosphere is reflected in a positive abnormal return of approximately 0.35% on the first trading day after the victory. This finding is robust to various event-study methods and to various benchmarks. This positive return is reversed several days later. Further, we do not find any indication of negative sentiment in other participating countries; specifically, in countries perceived as the losers of the contest. Finally, we do not find any indication that the positive market reaction reflects economic benefits stemming from a victory. Overall, we conjecture that a competition structure is an important determinant of investor sentiment in stock markets.
Original language | English |
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Article number | 106432 |
Journal | Journal of Banking and Finance |
Volume | 137 |
DOIs | |
State | Published - Apr 2022 |
Bibliographical note
Publisher Copyright:© 2022 Elsevier B.V.
Keywords
- Investor mood
- Investor sentiment
- Price reversal
- Stock market reaction
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