Market reactions to sport sponsorship announcements: Comparison between sponsors and their rivals

We would like to thank the editors, anonymous reviewers, Ihsan Badshah, Markus Breuer, GabrielA. Giménez Roche, and other participants at the ICS Faculty Seminar at Hitotsubashi University, the 2016 Vietnam Symposium in Banking and Finance, the 13th International Conference of the Western Economics Association International, and the 85^th Conference of the International Atlantic Economic Association for their helpful comments and suggestions. We are also grateful to Editage (http://www.editage.jp) for English language editing. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. All remaining errors are our own.

Highlights

•	Market responses to sport sponsorship announcements are positive for sponsors.
•	National congruence is positively related to market reactions.
•	Market responses to sport sponsorship announcements are negative for rivals in Japan.
•	Market reactions for sponsors are negative for events held for 2010–2014 in Japan.

Abstract

In this study, the authors investigate the impact of sport sponsorship announcements on the stock prices of sponsors and their rivals in Japan. The event study analyses show that while market reactions for Japanese sponsors are significantly positive, those for rivals are significantly negative. Thus, in Japan, sponsorships might help sponsors build a competitive advantage over their rivals. During 2010–2014, market reactions for sponsors are significantly more negative but less so when the sponsored party is Japanese.

Keywords:

• Sport sponsorship
• Event study
• Stock prices
• Ambush marketing

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Correction

Notes

We would like to thank the editors, anonymous reviewers, Ihsan Badshah, Markus Breuer, GabrielA. Giménez Roche, and other participants at the ICS Faculty Seminar at Hitotsubashi University, the 2016 Vietnam Symposium in Banking and Finance, the 13th International Conference of the Western Economics Association International, and the 85^th Conference of the International Atlantic Economic Association for their helpful comments and suggestions. We are also grateful to Editage (http://www.editage.jp) for English language editing. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. All remaining errors are our own.

1 The Daily Mail on August 12, 2016, available at http://www.dailymail.co.uk/news/article-3735355/How-Armour-outsmarting-Olympics-strict-advertising-rules-reaping-rewards-Phelps-USA-gymnastics-team.html.

2 There are 10 sponsored soccer teams (sponsors and their major shareholders): Hokkaido Consadole Sapporo (Sumitomo and Ishiya), Yokohama F. Marinos (Sanyo Shokai/Mizuno and Nissan), Urawa Red Diamonds (Meiji Seika/Sega and Diamonds F. C. Partners), Gamba Osaka (Hankyu Hanshin and Panasonic), F. C. Tokyo (Sanyo Shokai and Tokyo Gas), Tokyo Verdy (Konami and Buddy), Shonan Bellmare (HOYA and Sanei Archtecture Planning), Kashima Antlers (LIXIL and Nippon Steel & Sumitomo Metal), Yokohama Flügels (Bandai and ANA), and Shimizu S-PULSE (Ezaki Glico and Suzuyo).

3 There are four sponsored baseball teams (their sponsors and their major shareholders): Saitama Seibu Lions (DIP and Seibu Railway), Tokyo Yakult Swallow (Uniden/Kakaku.com and Yakult), Tohoku Rakuten Golden Eagles (Takara/Prima Meat Packers and Rakuten), and Osaka Kintetsu Buffaloes (Acom/C&S and Kintetsu Railway).

4 This selection process may be strict since we exclude Konami, a company that operates a wide range of business activities, including health and fitness clubs.

5 We use Nikkei Telecom to search for news on control firms.