Soccer, stock returns and fanaticism: Evidence from Turkey

Abstract

This paper assesses the effect of three major soccer teams’ wins on the returns of the Istanbul Stock Exchange (ISE). We argue that the effect of soccer wins on ISE returns increases with the fanaticism of the teams’ supporters.

Acknowledgements

We would like to thank Ibrahim Kirkayak, Rana Nelson and two anonymous referees for their valuable comments.

Notes

1 The name of the sport is football in some countries, and in Canada and the United States, it is soccer. In Australia, Ireland, Japan, New Zealand, and South Africa both words are commonly used.

2 Taylor and Tonks (1989) have also deflated various price index series using exchange rates. The US Standard and Poor's Composite Index, and the Japanese Tokyo New Stock Exchange Index were deflated by the UK Sterling exchange rate.

3 The lag order is determined by Bayesian Information Criteria.

4 The level of significance is 5% unless otherwise stated.

5 As a separate exercise, not reported here to save space, we also consider losses rather than wins. The statistical evidence was not significant for any team that we consider in this paper.

6 One could argue that it is not the degree of fanaticism but the number of supporters that might be the reason for Beşiktaş’s effect on the ISE. Although there are no official or reliable statistics available in Turkey regarding the number of fans of these three big teams, by observing the common media news, we can safely assume that their numbers are fairly equal.