By comparing the short-term and long-term economic impacts of the World Cup upon countries that host the spectacular event, this article will qualitatively demonstrate that the World Cup has positive impacts in the long run. Assessment will focus on three specific aspects of hosting the World Cup: Based on the conclusions in this paper, future studies should more focus on quantitative research that can measure the exact extent of the impacts.

The FIFA World Cup, as one of the most prestigious sporting mega-events in the world, is often assumed by potential host countries as highly profitable. Current research, however, suggests that the economic growth experienced by these host nations due to the World Cup event is lower than expectations. As for the long-term impacts, some scholars insist that the World Cup cannot boost the four sectors listed above Fedderson, Grotzinger and Maennig,while others argue that other beneficial factors, that do not affect the host countries in the short term, generate economic profits for host countries in the long term Maennig, In my opinion, the World Cup cannot bring profits in the short run, but is beneficial to the host countries in the long run, assuming that different factors are considered in the long-term analysis.

Not all factors affect every host nation to equal degrees; some may even hurt the benefit of certain host nations. But this paper will prove that the long-term impacts, as a whole, turn out to be positive.

In order to do prove this argument, this paper will first briefly introduce the debate on the short-term impacts; then illustrate why different determinant factors should be considered in the long term; finally it will focus on the detailed assessment of the three factors in the long term to prove why the general impacts are positive. Moreover, figuring out the long-term benefits of the World Cup will better assist policy-makers to make deliberate decisions, in order to maximize the profits for both the country and its citizens.

Elmer Sterkenas an economics professor in University of Groningen, also asserts that the World Cup increases the sale of sports facility manufacturers and breweries. More and more economists in the last five years, however, assert that the real economic growth in the short-term is questionable. Believing that stores and hotels will be crowded and expensive during the World Cup, these tourists may delay or cancel their journey to a host country to avoid unwanted stress.

The World Cup, therefore, only changes the types of tourists in a host nation but does not increase their number. That means, while the revenue brought by tourists is still positive, the actual revenue growth is minimal or lower than expectation. Additionally, Arne Fedderson, Andre Grotzinger and Wolfgang Maennigall members of the faculty in the Department of Economics in University of Hamburg, claim that only the spending from foreigners brings extra money to the host countries.

Therefore, revenue is lower because foreign spending is small, when compared with the whole GDP Fedderson et al. Also, adding the fact that many high-end hotels are owned by foreign enterprises, a big part of the increased accommodation revenue, in fact, escapes from the host country Maennig, Combining all the claims together, the scholars assert that the short-term economic impacts on host countries are not positive, or at least, not as much as expected.

Based on the short-term cost and benefit debates, some scholars use the same metrics to evaluate long-term impacts of the World Cup, focusing on changes in employment, tourism, accommodation and retailing. Professors Florian Hagn and Maennigfor instance, have assessed the long-term employment effects of the World Cup in Germany to find that the event has no positive impact on raising the employment rate after thirty years. Similarly, other scholars find that the long-term impacts on tourism, accommodation and retailing are also negligible in most host countries [2] Matheson, In this paper, however, it is argued that the long-term positive impacts are not reflected on employment or accommodation as mentioned above, but on new aspects like the stadiums, psychological states of citizens, and image of the host countries.

In the short term, the sudden influx of fans would directly stimulate consumption in retailing, accommodation, tourism and temporary employment. Some people may wonder why not use GDP to measure the long-term economic growth. GDP, I contend, is not an accurate indicator; even the real GDP that is adjusted for inflation has potential problems of counting repetitively and misevaluating the inflation index.

So, through a comprehensive consideration, this paper will qualitatively analyze the long-term impacts by focusing on stadiums, feel-good effect, and international perception.

Stadiums have a direct and huge cost to the host countries. FIFA requires the host country to have at least 12 modern stadiums dispersed in several host cities. The main stadium needs a capacity of forex color zuschnitt 80, people while the rest are required to be capable of hosting makes a lot of money thesaurus, spectators FIFA, In addition, every stadium requires nearly 3 billion dollars each year to maintain.

In spite of the cost, most host countries regard stadiums as investments forex trading plan example they generate profits from game tickets during and after the Cup.

While the ticket revenue during the World Cup is quite considerable, the revenue after the Cup is even more substantial. After the World Cup, usually all stadiums are used by domestic soccer clubs as home stadiums. Since some developed host countries like Germany and France have top soccer leagues that are more attractive than common stock trading company singapore, fans coming to future games can fill the stadiums almost every following competition.

1932 stock market drop after elections advanced stadiums often provide preferable seating, views, and lights, so more spectators are curious and willing to buy tickets to sporting events despite higher prices after the World Cup. This revenue can be huge, assuming that every week one stadium hosts an event for 50, fans.

Scholars Allmers and Maennig claim that this increased spending on tickets can make up for the maintenance of stadiums over the years. Several stadiums, such as the Allianz How much money does criss angel make in Munich and Wembley Stadium in London, have become the landmark buildings of host cities.

These iconic stadiums help enhance the perception of host cities and attract investments and tourists. Another benefit stadiums offer is the non-sports infrastructure that ends up springing up around them, such as expanded transportation networks and new business areas. Triggered by the World Cup, these infrastructures are supposed to boost the neighborhoods surrounding stadiums even when the event is over. However, the novelty effect of new stadiums is merely beneficial for developed host countries rather than developing host countries [3].

The impact of mega sports events on the stock markets

Usually, developing countries spend more money building new stadiums than developed countries, which often already have several stadiums qualified for the World Cup. As for usage after the World Stock trading screensaver, the average attendance for the South African soccer league is 7, with many of the stadiums out of use entirely after the World Cup Matheson, In fact, in South Africa, the business areas located in stadium precincts eventually become segregated Hendricks et al.

Therefore, when evaluating the effects of the new stadiums, developed and developing host countries should be discussed separately. The developed host countries spend less money on stadiums but receive more benefits pdf stock market for dummies them. However, the developing currency trading islamic finance are just the opposite — they spend a lot but earn little.

In short, the novelty effect of new stadiums only benefits the developed host countries. This increased purchasing power, measured as willingness-to-pay WTPis quantitatively certified by Heyne et al.

Kavetsos and Szymanski reconfirmed the theory that hosting mega-sport events like the Olympic Games and the World Cup can promote the happiness of residents. Hudson have proved that the good performance of the English team in the World Cup can raise the price of shares traded in London stock exchange.

And it is commonly acknowledged that a prosperous stock market tends to bring more vitality to the country. On the other hand, if the feel-good effect of a home team victory combines with an increase in national spirit due to hosting, the result can even improve productivity and efficiency.

So the feel-good effect not only increases the purchasing power of citizens, but also enhances the vitality of domestic industries. Though aspects of the feel-good effect are difficult to measure, it is widely accepted that this positive effect can influence a host country for a long time. With more and more scholars paying attention to the legitimacy of the feel-good effect, more quantitative research will certainly be conducted regarding it in the future.

With vast international exposure via media during the World Cup, a host country becomes the focus of the international community. This enhanced national image will, according to UC-Berkeley professors Spiegel and Roseincrease international trade and the impact of mega sporting events on stock markets in the host country. Specifically, they point out that the flow of capital quickens during the period of bidding before the World Cup, because, during the bidding phase, the demand of infrastructure investment is extremely large.

This enhanced perception benefits not only investment, but also future tourism. Visitors who enjoy accredited stock trading school World Cup trip, for instance, may want to describe the effects of the stock market crash of 1929 in the future. Television viewers, as well, might find the host country fascinating, and how to earn free yocash in yoville to travel there someday Matheson, Hosting the World Cup is truly a branding process for the host country and the enhanced perception, as a result of this process, helps the host countries in continuing to attract tourists and capital.

The impact of mega-sporting events on stock markets

Additionally, it can be asserted that the developing countries will benefit more from enhancing their national images since their images generally have more potential to be enhanced than the developed countries Meannig, Despite all the benefits from the improved international perception, some scholars such as Matheson, a professor in the College of Holy Cross, doubt that not all the publicity associated with hosting the World Cup is positive. Bribery, scandals, or terrorist events will decrease the reputation of the host country Matheson, While this is true, this kind of disgraceful news only occurs occasionally.

In general, the World Cup provides a platform for host countries to show themselves to the world, and this advertising effect of the World Cup is more influential than the occasional scandals. Admittedly, different host countries have different situations and therefore, the degrees of this enhancement vary, yet there is no doubt that the World Cup has this irreplaceable effect on enhancing the international perception of the host countries and cities.

By analyzing different factors from those in the short term, the analysis illustrates the positive long-term economic impacts of the World Cup. The novelty effect of new stadiums benefits host countries that are already developed while developing host countries actually suffer a loss from stadiums. But since the former two factors have potentially bigger positive influences to developing host countries, it is reasonable to assume that even the developing host countries still receive positive effects from the World Cup in the long run, though these benefits will be lower than those experienced by developed counties.

Future research in this area should therefore focus on the quantitative measurement of these impacts in order to figure out the full extent of the positive impacts in the host countries. However, governments of host countries rarely lower interest rates during the World Cup. Economic Impacts of the FIFA Soccer World Cups in FranceGermanyand Outlook for South Africa Eastern Economic Journal, Economic impact of national sporting success: Applied Economics Letters, 10 Valuing the intangible Impacts of Hosting the Summer Olympic Games.

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The Feel-good Effect at Mega Sports Events. Hamburg Contemporary Economic Discussions, University of Hamburg. Assessing the infrastructure impact of mega-events in emerging economies. College of the Holy Cross, No. The Business of Sports, Vol. Growth Impact of Major Sporting Events. European Sport Management Quarterly, 6 4.

Skip to main content. Main menu The People, Ideas, and Things Journal About PIT Conference Submit Join Contact us Login. Categories Humanities Interdisciplinary Studies Social Science Science Education Business Cycles Cycle 7, Cycle 6, Cycle 5, Cycle 4, Cycle 3, Cycle 2, Cycle 1, Assessing the Long-term Economic Impacts of the World Cup as Mega-sport Event. Published by the PIT Journal: Introduction The FIFA World Cup, as one of the most prestigious sporting mega-events in the world, is often assumed by potential host countries as highly profitable.

Difference between Short- and Long-term Based on the short-term cost and benefit debates, some scholars use the same metrics to evaluate long-term impacts of the World Cup, focusing on changes in employment, tourism, accommodation and retailing. The Novelty Effect of New Stadiums Stadiums have a direct and huge cost to the host countries. Conclusion By analyzing different factors from those in the short term, the analysis illustrates the positive long-term economic impacts of the World Cup.

Notes [1] If interest rates do fall, household and firms would invest more money, thus increasing the money supply in the market.

Bremen University, University of Technologie Munich and Hamburg University, Working Paper Horne, J. Paper presented at Hamburg Symposium of Sport and economics, Kim, W. A New Football Culture Accruing in Asia. Log in to post comments.