Rationality and Emotion in European Football: How Share Prices React to a New Coach’s Appointment


SVOBODA Martin ZURECK Alexander FRÉRE Eric

Year of publication 2014
Type Article in Proceedings
Conference European Financial Systems 2014
MU Faculty or unit

Faculty of Economics and Administration

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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