The effect of sports sponsorship on sponsoring firms : an event study

Abstract

The paper shows that sports sponsorship in Lebanon has a positive effect on the value of the sponsoring firms. Event study approach is used to analyze the stock price abnormal returns, for 150 daily closing prices, of 2 publicly traded firms on Beirut Stock Exchange (BSE) that are sponsoring the BLOM Bank Beirut Marathon 2012 event. Abnormal returns are measured by regressing the logarithmic returns of the sponsoring firms on BLOM Stock Index (BSI), the benchmark index. The Cumulative effect of abnormal returns is captured through event windows stretching from t=-3 to t=+3. The results confirm that the cumulative average abnormal return (CAAR) of both firms is positive during t=-1 to t=+1.