Purpose-Utilizing the capital asset pricing model (CAPM), the purpose is to analyze whether the s... more Purpose-Utilizing the capital asset pricing model (CAPM), the purpose is to analyze whether the stock prices of the corporation that owns sport teams fluctuate based on team performance in the Chinese Super League (CSL). Design/methodology/approach-Several CSL teams are publicly owned corporations. As such, the authors look to see if on-field performance impacts the stock price of the firms. Using the news model from previous research, seemingly unrelated regressions are estimated on CSL games from 2014 through 2017. Findings-The results from the main models indicate some evidence of a statistical relationship between onfield team performance and stock price. Furthermore, the findings for individual teams across markets did not hold consistent across different markets. More specifically, the authors found some instances where successful on-field performance led to a decline in stock prices. Originality/value-The present study further contributes to the growing literature related to on-field performance and stock prices. Unlike previous research, the use of the CSL as the empirical setting provides the opportunity to use multiple stock markets which provides an opportunity to further examine this relationship. Finally, the study contributes broadly to the literature on professional sports ownership structures around the world. Keywords China, Soccer, Stock prices, Chinese Super League Paper type Research paper There is a long history examining the evolution of professional sport team ownership (e.g. Harvey et al., 2001; O'Reilly, 2019) exploring issues such as arena development (Mason et al., 2017), changes in ownership backgrounds (Harvey et al., 2001) and franchise values (Scelles et al., 2013). Winfree and Rosentraub (2012) and O'Reilly (2019) outlined and summarized professional ownership models: sole proprietorship/family, partnership/investment syndicate, public traded corporation and community. While few clubs are publicly owned or part of publicly owned companies in North America (O'Reilly, 2019), the ownership model is common in other parts of the world such as Japan and China (Kang et al., 2019). Recent research examined whether sports stocks, specifically stocks of football clubs, could be considered an asset class of its own (Prigge and Tegtmeier, 2020). There is a growing body of the literature examining the relationship between stock price and the performance of publicly traded sport organizations (e.g. Brown and Hartzell, 2001; Chen and Chen, 2012; Coates and Humphreys, 2008). Notably, this line of research extends previous studies considering how managerial decisions (Mitchell and Stafford, 2000), organization performance (Hendricks and Singhal, 2001), foreign ownership (Chen et al., 2019) and disruptions to the market (King and Soule, 2007) can impact the value of publicly traded corporations. The theoretical idea behind such inquiry is the "news model," which proposes CSL stock prices and team performance
Sport, Business and Management: An International Journal, 2020
PurposeUtilizing the capital asset pricing model (CAPM), the purpose is to analyze whether the st... more PurposeUtilizing the capital asset pricing model (CAPM), the purpose is to analyze whether the stock prices of the corporation that owns sport teams fluctuate based on team performance in the Chinese Super League (CSL).Design/methodology/approachSeveral CSL teams are publicly owned corporations. As such, the authors look to see if on-field performance impacts the stock price of the firms. Using the news model from previous research, seemingly unrelated regressions are estimated on CSL games from 2014 through 2017.FindingsThe results from the main models indicate some evidence of a statistical relationship between on-field team performance and stock price. Furthermore, the findings for individual teams across markets did not hold consistent across different markets. More specifically, the authors found some instances where successful on-field performance led to a decline in stock prices.Originality/valueThe present study further contributes to the growing literature related to on-fie...
Uploads
Papers by Eric Mao