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Purpose Using a stakeholder perspective, this paper aims to investigate the effectiveness of sponsorship as a business investment by assessing the impact of sponsorship announcements on the shareholders' reactions of the sponsoring firms. These reactions are examined in two different occasions: in an international mega sport event such as the Olympic Games and in sport organizations such as sport federations/associations. Design/methodology/approach Event study analysis by using multiple regression models and bootstrapping techniques were employed to study the effects of sponsorship announcements. The sample consisted of sponsors of the 2004 Olympic Games and sponsors of national sport federations. Findings Overall, the results of the study did not indicate any significant effects of sponsorship announcements on the stock prices of sponsoring firms, suggesting that shareholders' reactions to this business activity are limited. Originality/value This is the first research initiative that utilizes a stakeholder approach in examining sponsorship effectiveness. The findings provide evidence that shareholders do not perceive sport sponsorships as business investments due to limited information provided by the sponsoring firms. In addition to theoretical and practical implications, the study proposes a new methodological approach in evaluating the impact of sport sponsorship. Multiple regression models applying bootstrap techniques to avoid data distribution and small sample problems are recommended.
Rodoula H. Tsiotsou (Tue,) studied this question.