My friend David R. sent me the link to a paper from the investigating the effect that international footbal competitions have on the stock market. The authors found a statistically significant decline in stock returns after losses in World Cup elimination matches. Their model attributes the loss effect on reduced productivity or loss revenues. Curiously, they found no uptick corresponding to victories.
One reason they chose to investigate this phenomenon was as a way to see if just overall investor mood, independent of market information and conditions, alone has an effect on market reactions.
Using a cross-seciton of 42 countries, we find that losses in international footbal matches have an economically and statistically significant negative effect on the losing country’s stock market.