Are sponsorship announcements good news for the shareholders? Evidence from international stock exchanges
- 1.4k Downloads
The objective of this study is to analyse investors’ perceptions of sponsorship’s ability to increase brand equity, through the impact of sponsorship announcement on stock market value. An event study method, based on a unique sample of 293 worldwide sponsorship announcements from 2010, shows substantial negative abnormal returns following announcement dates. In addition, a cross-sectional regression analysis reveals the influence of several featured factors. Philanthropic sponsorships and sponsorships of events with distinctive values are less negatively perceived by investors, but US companies exhibit more negative returns in shareholder value than other firms. This study offers no support for varying impacts of event audience, renewal agreement, property sponsorship and title sponsorship on abnormal returns though.
KeywordsEvent study Sponsorship International marketing Finance
The authors would like to thank Dr. Charles Bal, former General Manager of brandRapport France, who invited us to analyze the database at the core of this study. We also thank Vincent de Lavarenne for his outstanding research assistance. Finally, we greatly appreciate the constructive comments offered by editor G. Tomas M. Hult and two anonymous reviewers.
- Bhattacharya, C. B., Korschun, D., & Sen, S. (2011). What really drives value in corporate responsibility?. McKinsey Quarterly, December, https://www.mckinseyquarterly.com/What_really_drives_value_in_corporate_responsibility_2895.
- Calderon-Martinez, A., Mas-Ruiz, F. J., & Nicolau-Gonzalbez, J. L. (2005). Commercial and philanthropic sponsorship–direct and interaction effects on company performance. International Journal of Market Research, 47, 75–99.Google Scholar
- Chang, D. R., & Davis, J. A. (2012). Think small in Olympic Sponsorship. Harvard Business Review, August, http://blogs.hbr.org/cs/2012/08/think_small_in_olympic_sponsor.html.
- Clark, J. M., Cornwell, T. B., & Pruitt, S. W. (2002). Corporate stadium sponsorship, signaling theory, agency conflicts and shareholder wealth. Journal of Advertising Research, 42, 16–32.Google Scholar
- European Commission (1999). The European model of sport. Retrieved 15 August, 2012 from http://ec.europa.eu/sport/documents/library/doc248_en.pdf.
- Evans, R. D. (2010). Olympic sponsorships: a winning investment? Society for Marketing Advances Proceedings, 181–182.Google Scholar
- International Events Group (2011). Sponsorship spending: 2010 proves better than expected; bigger gains set for 2011. Retrieved February 8, 2011, from http://www.sponsorship.com/IEGSR/2011/01/04/Sponsorship-Spending--2010-Proves-Better-Than-Expe.aspx.
- International Events Group (2012). Sponsorship spending: economic uncertainty to slow sponsorship growth in 2012 Retrieved November 18, 2012, from http://www.sponsorship.com/About-IEG/Press-Room/Economic-Uncertainty-To-Slow-Sponsorship-Growth-In.aspx.
- Jagre, E., Watson, J. J., & Watson, J. G. (2001). Sponsorship and congruity theory; a theoretical framework for explaining consumer attitude and recall of event sponsorship. In M. C. Gilly & J. Meyers-Levy (Eds.), Advances in consumer research (pp. 439–445). Valdosta: Association for Consumer Research.Google Scholar
- Jones, J. P. (1990). Ad spending: maintaining market share. Harvard Business Review, 68, 38–42.Google Scholar
- Knittel, C. R., & Stango, V. (2010). Celebrity endorsements, firm value and reputation risk: evidence from the Tiger Woods Scandal. Retrieved August 15, 2012 from http://www.econ.ucdavis.edu/faculty/knittel/papers/tiger_latest.pdf.
- Marshall, D. (1992). Does sponsorship always talk the same language? An overview of how attitudes to sponsorship vary across Europe. In Expoconsult (Ed.), Sponsorship Europe ‘92 Conference Proceedings (pp. 151–171). Maarssen: ESOMAR.Google Scholar
- Michaelis, M., Woisetschlager, D. M., & Hartleb, V. (2008). An empirical comparison of ambushing and sponsorship effects: the case of the 2006 FIFA World Cup Germany. In A. Y. Lee & D. Soman (Eds.), Advances in consumer research (pp. 527–533). Duluth: Association for Consumer Research.Google Scholar
- Miyazaki, A. D., & Morgan, A. G. (2001). Assessing market value of event sponsoring: corporate Olympic sponsorships. Journal of Advertising Research, 41, 9–13.Google Scholar
- Nidumolu, R., Prahalad, C. K., & Rangaswami, M. R. (2009). Why sustainability is now the key driver of innovation. Harvard Business Review, 87, 56–64.Google Scholar
- Nielsen (2011). Global advertising rebounded 10.6% in 2010, Retrieved 21 July, 2012, from http://www.nielsen.com/us/en/insights/press-room/2011/global-advertising-rebound-2010.html.
- O’Reilly, N. & Seguin, B. (2011). Canadian sponsorship landscape study. Retrieved August 8, 2012, from http://www.sponsorshipmarketing.ca/CSLS_5thannual_2011.pdf.
- Pegoraro, A., O’Reilly, N., & Levallet, N. (2009). Gender-based sponsorship of grassroots events as an agent of corporate social responsibility: the case of a national women’s triathlon series. Journal of Sponsorship, 2, 140–151.Google Scholar
- Pham, M. T. (1992). Effects of involvement, arousal, and pleasure on the recognition of sponsorship stimuli. In J. F. Sherry & B. Sternthal (Eds.), Advances in Consumer research (pp. 85–93). Provo: Association for Consumer Research.Google Scholar
- Quester, P. G., & Thompson, B. (2001). Advertising and promotion leverage on arts sponsorship effectiveness. Journal of Advertising Research, 41, 33–47.Google Scholar
- Sandler, D. M., & Shani, D. (1989). Olympic sponsorship vs. ambush marketing: who gets the gold? Journal of Advertising Research, 29, 9–14.Google Scholar
- Sponsorship Research International. (1996). Worldwide sponsorship values. London: SRI.Google Scholar
- Thjømøe, H. M., Olson, E. L., & Bronn, P. S. (2002). Decision-making processes surrounding sponsorship activities. Journal of Advertising Research, 42, 6–15.Google Scholar