Explaining Share Price Performance of Football Clubs Listed on the Euronext Lisbon

Duque, João; Ferreira, Nuno Abrantes

doi:10.2139/ssrn.675633

Download This Paper

Open PDF in Browser

Add Paper to My Library

Explaining Share Price Performance of Football Clubs Listed on the Euronext Lisbon

ISEG - Universidade Tecnica de Lisboa Business Administration Working Paper No. 05-01

38 Pages Posted: 28 Feb 2005

See all articles by João Duque

João Duque

Technical University of Lisbon (UTL) - School of Economics and Management

Nuno Abrantes Ferreira

Technical University of Lisbon (UTL) - School of Economics and Management

Date Written: January 2005

Abstract

The literature concerning the effects of sporting performance on football shares is scarce. Football clubs used to be non-profit organisations and their members had different rights and views from those which affect today's shareholders' perspectives and analysis. We were particularly concerned with sporting performance and how it impacts on share price returns for football clubs.

Using the football shares quoted in Euronext Lisbon Stock Exchange and the ARCH and GARCH methodology we found a positive relationship between stock price returns and sporting performance. Therefore, we could provide empirical evidence for immediate impact of victories, draws or defeats on price returns. We also found that impact to be related to the approach of the end of the season. This is in line with previous research on the topic, although using a different methodology. When we look at volatility, apart from showing strong clustering signs, a critical variable seems to be the trading volume around the stock that comes with the end of the season.

Keywords: Economics of sports, Soccer club valuation, Share price reactions

JEL Classification: G1, G14

Suggested Citation: Suggested Citation

Correia Duque, João Luís and Ferreira, Nuno Abrantes, Explaining Share Price Performance of Football Clubs Listed on the Euronext Lisbon (January 2005). ISEG - Universidade Tecnica de Lisboa Business Administration Working Paper No. 05-01, Available at SSRN: https://ssrn.com/abstract=675633 or http://dx.doi.org/10.2139/ssrn.675633