The Financial Legacy of Hosting the Olympic games; Economic Gains or Fiscal Burden?
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2025-07-07
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en
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This thesis investigates the financial and economic legacy of hosting the Olympic Games, focussing on macroeconomic indicators and investor sentiment. Rather than measuring direct expenditures or revenues, it analyses realized effects on GDP growth, unemployment, inflation, and central government debt, alongside stock market reactions.
Employing a matched difference-in-differences approach combined with an event-study analysis of stock market data, this research evaluates the overall impact of hosting and explores how effects vary between Summer and Winter Olympics and across developed and developing countries.
Findings suggest that the macroeconomic benefits of hosting the Olympics are modest and short-lived. GDP growth shows brief improvements around three to five years post-event, but these benefits diminish or reverse shortly after. Unemployment, inflation, and central government debt do not show consistent changes. Developed countries and hosts of Summer Olympics experience more stable economic outcomes compared to developing countries and hosts of Winter Games. Stock market reactions to key Olympic milestones are generally statistically insignificant, with the exception of a modest positive reaction when Summer Olympics or developed countries are awarded hosting rights.
Overall, the thesis challenges optimistic narratives surrounding mega-events, emphasizing the importance of institutional capacity, economic resilience, and careful policy evaluation when considering Olympic bids.
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Faculteit der Managementwetenschappen