The Economic Impact of Mega Sport Event

Hallmark sporting events have evolved from a competitive opportunity of showing national pride to commercially driven entertainment entities which seem to prosper from the economic stimulation of the event. Due to the growing popularity of these mega-sport events, cities and countries around the world are continually evaluating the potential of using these events to draw attention to the host. This thesis seeks to contribute to the controversial discussion of whether or not to invest in hosting a mega-sport event. Every stage of sporting events can reveal positive or negative influences, starting from a competitive bidding process, to the construction of infrastructure, and to the post-event effects. This thesis will focus on three aspects: (i) the anticipated impact of hosting a mega sport event in the short run versus long run by analyzing notable macroeconomic variables: expenditure, investment, and government spending; (ii) econometric analysis of long run panel data of gross domestic product per capita growth; and (iii) will also attempt to answer the question of why hosting a mega sport event did or did not work via. Applying basic macroeconomic principles, the original hypothesis suggested that the impact of hosting a mega-sport event would result in an expected short-run burst domestic product per capita (GDPPC) followed by a slight leveling off of the GDPPC in the medium and long term. Applying linear regressions over a twenty-year period, it is possible to evaluate the impact of hosting an event. Such analysis of the data indicated that it may be worthwhile for a country to host the World Cup but hosting either of the Olympic Games would likely be a costly endeavor