Corporate sponsorship is a form of advertising in which companies commit and pay to be associated with certain events. Corporate sponsorships of an event, such as the Olympic Games, may feel the need to evaluate the returns on their investment. In order to evaluate these investments, and how they pay off, an event study has been completed. The risk-adjusted event study methodology was used to test the hypothesis that risk-adjusted return of the sponsor companies stock prices are significantly positively affected by the type of information. The event study tested the effect of the 2008 Beijing, 2012 London and 2016 Rio Summer Olympic games on the sponsor company’s’ stock prices. The opening ceremonies took place on August 8th, 2008, July 27th, 2012 and August 5th, 2016. The information gathered and evidence provided demonstrates throughout all three summer Olympic games, firms showed positive gains to their stock price leading to the opening ceremony, and minimal gains following the opening ceremony. These results confirm the semi-strong form of market efficiency. No investor was able to make above normal return acting on past information.
Hutchinson, Joshua, "The 2008, 2012, and 2016 Summer Olympics: A Test Market Efficiency" (2020). Longwood Senior Theses. 1.