Rationality and Emotion in European Football: How Share Prices React to a New Coach’s Appointment
| Authors | |
|---|---|
| Year of publication | 2014 |
| Type | Article in Proceedings |
| Conference | European Financial Systems 2014 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | change in coach; event study; information efficiency; STOXX Europe Football Index |
| Description | The appointment of a new coach is often a turning point for the development of a football club’s game. But apart from the development of its game, the change affects the club’s economic prospects as well. The coach has a position similar to that of a leading manager in “classic” firms. Other studies have intensively investigated reactions in share prices to results of specific games (see, instead of many, Ashton et al. 2011). The relationship between a change in a club’s coach and the reaction of share prices has rarely been investigated. The aim of this paper is to find out whether there is a statistically significant influence on the share price performance of a listed European football club following a change in its coach. The findings within the paper demonstrate that the appointment of a new coach immediately affects the stock’s performance. The analysis is based on the STOXX Europe Football Index. The index contains 23 European football clubs that are listed on a European stock exchange. The investigation stretches over a period of nine years, from 31.08.2004 to 19.09.2013. The sample contains 46 observations. The event study is on the basis of abnormal returns. The test period covers +/- 3 days around the time of announcement of a new coach. This precludes mistakes arising from other effects, such as results of games. |
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