Market Reaction Toward Match Result in Football

Abstract

Along with the growth of sport industry, especially football. This paper wants to know the relation between match result and stock market reaction. This paper focuses on three clubs: Manchester united, Juventus FC, and Borussia Dortmund. The purpose of this research is to know the effect of match result on market reaction for football club. This paper only considers lose and win result for these three clubs. The market reaction that the researcher focus on are abnormal return and trade volume. This paper uses efficient market theories. Researcher use event window and conducted mean difference analysis to examine the effect of match result on market reaction after the match. Observation on stock market start at one day before the match and one day after the match conducted. Researcher also include type of competition and venue of the match. This paper finds that besides the result investor also consider type of competition and venue for their investment decision. Even though the result is the same but if the type of competition and venue are different it could give different effect on investor decision. This paper also proves that stock market of football club is semi-strong efficient market.