The Effect of Investment in European Football on the Market Value of Chinese Corporations

Yangyang Chen
Helmut M. Dietl
Johannes Orlowski
and Fang Zheng

This paper analyzes how investments in professional European football clubs affect the market value of Chinese corporations. Twelve acquisition cases with complete stock return data are identified between 2009 and 2017. Applying traditional financial event study methodology, it appears that Chinese corporations, on average, do not earn abnormal returns as a result of their investments in professional European football clubs. However, as exceptions to this finding, a few corporations show significant positive or negative abnormal returns. This study also hints at an association between the change in market value of acquiring corporations, the relative transaction size, and their industry relatedness. These findings have important implications for corporate and football managers, current stock holders, and future investors.

JEL Classifications: Z23, G14, G34