Predictable Sports Sentiment And Local Trading

Abstract

We examine whether predictable outcomes of the National Basketball Association playoff games can generate increased trading of firms headquartered in the geographic area of the participating teams. We find statistically significant increased trading before games and this effect is more pronounced and persistent for games with more predictable outcomes, for predictable losses more than wins, and for more critical games. We also find that this effect is more pronounced for firms that are more vulnerable to shifts in investor sentiment and we find weak evidence that trading leads to price effects. The results are consistent with the hypothesis that predictable sentiment can drive investor behavior.

Publication Date

6-1-2017

Publication Title

Financial Management

Volume

46

Issue

2

Number of Pages

433-453

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1111/fima.12124

Socpus ID

85020812076 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/85020812076

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