Are sponsorship announcements good news for the shareholders? Evidence from international stock exchanges

The Effect of Sponsorship Announcements on Stock Returns: Does Industry Concentration Matter?

“…These findings are consistent with the previous studies (Raassens, However, investors' evaluations vary such that they evaluate some sponsorships favorably while evaluate some others negatively. This is consistent with the knowledge that stock returns reflect investors' perceptions of whether the sponsorship can provide future cash flows (Mazodier & Rezaee, 2013). Our study indicated that sponsorship announcements created negative (positive) abnormal returns in concentrated (non-concentrated) markets.…”

“…Accordingly, investors follow and are influenced by marketing related factors (Bharadwaj, Tuli, & Bonfrer, 2011). Hence there is a stream of research (Clark et al, 2009;Cornwell, Roy, & Steinard, 2001;Filis & Spais, 2012;Mazodier & Rezaee, 2013;George S Spais & Filis, 2008;Tripodi & Hirons, 2009) focusing on whether sponsorship increases stock prices.…”

“…Some of the studies (Baim et al, 2015;Kudo, Jae Ko, Walker, & Connaughton, 2015;Pruitt, Cornwell, & Clark, 2004;Reiser, 2012) using even study to test influence of sponsorship announcements on stock returns, indicated significant increases in stock prices while some others (Mazodier & Rezaee, 2013;Tsiotsou, 2011) found significant decreases in stock prices. Those conflicting findings depend on endogenous firm specific and sporting event-specific factors such sponsorship type, congruence of event and sponsor, nature of sponsor, size of sponsor, and for new and renewing sponsors and so on (Filis & Spais, 2012;Mazodier & Rezaee, 2013).…”

“…Those conflicting findings depend on endogenous firm specific and sporting event-specific factors such sponsorship type, congruence of event and sponsor, nature of sponsor, size of sponsor, and for new and renewing sponsors and so on (Filis & Spais, 2012;Mazodier & Rezaee, 2013). However, exogenous environmental factors may also be considered.…”

“…awareness, image). Hence, one of the main topics in sponsorship literature has been the linkage between sponsorship and stock returns (Clark, Cornwell, & Pruitt, 2009;Cornwell, Pruitt, & Clark, 2005;Khvastunov, 2011;Mazodier & Rezaee, 2013; George S Spais & Filis, 2008; George S. Spais & Johnston, 2014). However, previous studies provided conflicted results indicating that the effects on stock returns caused by sponsorships are not same for all sponsorship deals and sensitive to firm and event characteristics.…”