Title Sponsorships in Sports events and stock price behavior: Evidence from Pakistan Super League

Authors

Abstract

ABSTRACT

The purpose of this study is to examine stock price behaviour of Habib Bank Ltd following title sponsorship announcements and events of Pakistan Super League. For this purpose, secondary data collected relating to Pakistan Super League and HBL Stock prices from 2015 to 2019 by applying an event study methodology. The results of the event study analysis of title sponsorship announcement revealed significant increases in stock prices of the Habib Bank, Ltd around the announcement and the event days, however, no significant positive changes were noticed after the renewal of aforementioned sponsorship announcement. Moreover, the results also showed no significant influence in the case of renewal of the said title sponsorship on the stock prices behaviour during the pre and post-event windows. Hence, this study results suggested that the sponsoring firm should focus on its marketing strategies to effectively promote its sponsorship campaign and to capture investor’s attention in the market during the event days. This study contributes to the existing literature as being the first study on title sponsorship announcements and renewals of Pakistan Super League and its effect on the stock price behaviour of Habib Bank, limited.

Keywords: Title Sponsorship, Pakistan Super League, Stock Prices, Event Study.

Author Biographies

Furqan Ullah, Islamia College, Peshawar

Department of Management Sciences

PhD Scholar

Hamid Ullah, Islamia College, Peshawar

Department of Management Sciences

Assistant Professor

Faiza Mahreen, City university of Science and IT, Peshawar

Department of Management Sciences

MS Scholar

References

References

Abuzayed, B. (2013). Sport and emerging capital markets: market reaction to the 2022 World Cup announcement. International Journal of Islamic and Middle Eastern Finance and Management, 6(2), 122–141. https://doi.org/10.1108/17538391311329824

Agrawal, J., & Kamakura, W. A. (1995). The Economic Worth of Celebrity Endorsers: An Event Study Analysis. Journal of Marketing, 59(3), 56. https://doi.org/10.2307/1252119

Berman, G., Brooks, R., & Davidson, S. (2002). The Sydney Olympic Games announcement and the Australian stock market reaction. Applied Economics Letters, 7(12), 781–784. https://doi.org/10.1080/135048500444796

Bezler, J. (2013, April 22). The (R)evolution of Sports Sponsorship. Forbes. Retrieved from www.forbes.com/sites/jasonbelzer/2013/04/22/the-revolution-of-sport-sponsorship/#27c0536f6c90

Bibby, D. N. (2009). Brand image, equity, and sports sponsorship. Advances in Culture, Tourism and Hospitality Research, 3, 21–99. https://doi.org/10.1108/S1871-3173(2009)0000003006

Blake, J., Fourie, S., & Goldman, M. (2019). The relationship between sports sponsorships and corporate financial returns in South Africa. International Journal of Sports Marketing and Sponsorship, 20(1), 2–25. https://doi.org/10.1108/IJSMS-12-2016-0088

Clark, J. M., Cornwell, T. B., & Pruitt, S. W. (2009). The impact of title event sponsorship announcements on shareholder wealth. Marketing Letters, 20(2), 169–182. https://doi.org/10.1007/s11002-008-9064-z

Cornwell, T. B., Pruitt, S. W., & Clark, J. M. (2005). The Relationship Between Major-League Sports’ Official Sponsorship Announcements and the Stock Prices of Sponsoring Firms. Journal of the Academy of Marketing Science, 33(4), 401–412. https://doi.org/10.1177/0092070305277385

Cornwell, T. Bettina, Pruitt, S. W., & Van Ness, R. (2001). The value of winning in motorsports: Sponsorship-linked marketing. Journal of Advertising Research, 41(1), 17–31. https://doi.org/10.2501/JAR-41-1-17-31

Crompton, J. L. (2004). Conceptualization and alternate operationalizations of the measurement of sponsorship effectiveness in sport. Leisure Studies, 23(3), 267–281. https://doi.org/10.1080/0261436042000183695

D Foust, B. G. (2002). The PGA Tour: Where’s the Green? Business Week Online.

Dick, C. D., & Wang, Q. (2010). The economic impact of the Olympic Games: Evidence from stock markets. Applied Economics Letters, 17(9), 861–864. https://doi.org/10.1080/13504850802552291

Dolphin, R. R. (2003, September 11). Sponsorship: Perspectives on its strategic role. Corporate Communications: An International Journal, Vol. 8, pp. 173–186. https://doi.org/10.1108/13563280310487630

Edeling, A., Hattula, S., & Bornemann, T. (2017). Over, out, but present: recalling former sponsorships. European Journal of Marketing, 51(7/8), 1286–1307. https://doi.org/10.1108/EJM-05-2015-0263

Fama, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. The Journal of Finance, 25(2), 383. https://doi.org/10.2307/2325486

Fatima, A., Rashid, A., & Khan, A. uz Z. (2019). Asymmetric impact of shocks on Islamic stock indices: a cross country analysis. Journal of Islamic Marketing, 10(1), 2–86. https://doi.org/10.1108/JIMA-04-2017-0043

Ferreira, M., Hall, T. K., & Bennett, G. (2016). Exploring Brand Positioning in a Sponsorship Context: A Correspondence Analysis of the Dew Action Sports Tour. Journal of Sport Management, 22(6), 734–761. https://doi.org/10.1123/jsm.22.6.734

Frame, W. S., & Farrell, K. A. (2005). The Value of Olympic Sponsorships: Who is Capturing the Gold? SSRN Electronic Journal, 2(2), 171–182. https://doi.org/10.2139/ssrn.282975

Haug, M., & Hirschey, M. (2006, September 11). The January effect. Financial Analysts Journal, Vol. 62, pp. 78–88. https://doi.org/10.2469/faj.v62.n5.4284

Hirshleifer, D., & Shumway, T. (2003, June 1). Good Day Sunshine: Stock Returns and the Weather. Journal of Finance, Vol. 58, pp. 1009–1032. https://doi.org/10.1111/1540-6261.00556

Hobbs, J., Schaupp, L. C., & Gingrich, J. (2016). Terrorism, militarism, and stock returns. Journal of Financial Crime, 23(1), 70–86. https://doi.org/10.1108/JFC-01-2015-0002

Jensen, J. A., & Hsu, A. (2011). Does sponsorship pay off? An examination of the relationship between investment in sponsorship and business performance. International Journal of Sports Marketing and Sponsorship, 12(4), 352–364. https://doi.org/10.1108/IJSMS-12-04-2011-B006

Johnston, M. A. (2010). The impact of sponsorship announcements on shareholder wealth in Australia. Asia Pacific Journal of Marketing and Logistics, 22(2), 156–178. https://doi.org/10.1108/13555851011026926

Kruger, T. S., Goldman, M., & Ward, M. (2014). The impact of new, renewal and termination sponsorship announcements on share price returns. International Journal of Sports Marketing and Sponsorship, 15(4), 10–25. https://doi.org/10.1108/IJSMS-15-04-2014-B003

Kudo, M., Jae Ko, Y., Walker, M., & Connaughton, D. P. (2015). The influence of title sponsorships in sports events on stock price returns. International Journal of Sports Marketing and Sponsorship, 16(2), 37–56. https://doi.org/10.1108/IJSMS-16-02-2015-B004

Malkiel, B. G. (2003). The efficient market hypothesis and its. Journal of Economic Perspectives, 17(1), 59–82. https://doi.org/10.1257/089533003321164958

Mazodier, M., & Rezaee, A. (2013). Are sponsorship announcements good news for the shareholders? Evidence from international stock exchanges. Journal of the Academy of Marketing Science, 41(5), 586–600. https://doi.org/10.1007/s11747-013-0325-x

McCarville, R. E., & Copeland, R. P. (2016). Understanding Sports Sponsorship through Exchange Theory. Journal of Sport Management, 8(2), 102–114. https://doi.org/10.1123/jsm.8.2.102

Mirman, M., & Sharma, R. (2010). Stock market reaction to Olympic games announcement. Applied Economics Letters, 17(5), 463–466. https://doi.org/10.1080/13504850801964349

Mishra, D. P., Bobinski Jr., G., & Bhabra, H. (1997). Assessing the Economic Worth of Corporate Event Sponsorships: A Stock Market Perspective. Journal of Market-Focused Management, 2(2), 149–169. https://doi.org/10.1023/A:1009731419345

Mishra, V., & Smyth, R. (2010). An examination of the impact of India’s performance in one-day cricket internationals on the Indian stock market. Pacific-Basin Finance Journal, 18(3), 319–334. https://doi.org/10.1016/j.pacfin.2010.02.005

Miyazaki, A. D., & Morgan, A. G. (2015). Assessing the Market Value of Sponsoring: Corporate Olympic Sponsorships. Journal of Advertising Research, 41(1), 9–15. https://doi.org/10.2501/jar-41-1-9-15

Ozturk, M. A., & Kocak, S. (2016). Impact of Sponsorship on Companies That Supported the 2002 Salt Lake City Winter Paralympics. International Journal of Sports Marketing and Sponsorship, 5(4), 38–51. https://doi.org/10.1108/ijsms-05-04-2004-b005

Paula Gardner, M., & Shuman, P. J. (1987). Sponsorship: An important component of the promotions mix. Journal of Advertising, 16(1), 11–17. https://doi.org/10.1080/00913367.1987.10673055

Pruitt, S. W., Cornwell, T. B., & Clark, J. M. (2004). The NASCAR phenomenon: Auto racing sponsorships and shareholder wealth. Journal of Advertising Research, 44(3), 281–296. https://doi.org/10.1017/S0021849904040279

Rex, J., & Homans, G. C. (2007). Social Behaviour, Its Elementary Forms. The British Journal of Sociology, 13(1), 75. https://doi.org/10.2307/587952

Samitas, A., Kenourgios, D., & Zounis, P. (2008). Athens’ Olympic Games 2004 impact on sponsors’ stock returns. Applied Financial Economics, 18(19), 1569–1580. https://doi.org/10.1080/09603100701720336

Seif, M., Docherty, P., & Shamsuddin, A. (2017). Seasonal anomalies in advanced emerging stock markets. The Quarterly Review of Economics and Finance, 66, 169–181. https://doi.org/10.1016/J.QREF.2017.02.009

Sell, J., & Martin, M. W. (1983). The effects of group benefits and type of distribution rule on noncompliance to legitimate authority. Social Forces, 61(4), 1168–1185. https://doi.org/10.1093/sf/61.4.1168

Simon, H. A. (2002). Rationality in Psychology and Economics. The Journal of Business, 59(S4), S209. https://doi.org/10.1086/296363

Spais, G. S., & Filis, G. N. (2008). Measuring the stock market reaction to sponsorship announcements: The case of Fiat and Juventus. Journal of Targeting, Measurement and Analysis for Marketing, 16(3), 169–180. https://doi.org/10.1057/jt.2008.13

The Economist. (2008). Sponsorship form - A survey of the business of sport. Retrieved from https://www.economist.com/special-report/2008/07/31/sponsorship-form

Weekly Pakistan. (2019). PSL signs new sponsorship deal with HBL | Weekly Pakistan. Retrieved July 31, 2019, from https://www.theweeklypakistan.com/2018/11/18/psl-signs-new-title-sponsorship-deal-with-hbl/

Yang, G. J. A., Lee, C., & Lee, C. H. (2015). Random Walk in the MIST. Journal of Asia-Pacific Business, 16(2), 92–104. https://doi.org/10.1080/10599231.2015.1028303

Downloads

Published

30.06.2021

How to Cite

Ullah, F., Ullah, H., & Mahreen, F. (2021). Title Sponsorships in Sports events and stock price behavior: Evidence from Pakistan Super League. CITY UNIVERSITY RESEARCH JOURNAL, 11(2). Retrieved from http://cusitjournals.com/index.php/CURJ/article/view/314

Issue

Section

Articles