The Impact of Match-Fixing Scandals on the Stock Returns of Parent Companies and Sponsors: Evidence from Chinese Professional Baseball League In Taiwan

Abstract

Although an increasing number of literature indicate the positive impact of sponsoring major sports events or themed competitions, few studies have examined how a match-fixing scandal occurring in the most popular and national professional sports impacts the stock abnormal returns of the parent company and sponsor. Using event study method with content analysis, this study focused on the spillover effect of incidents involving sports ethics violations. Specifically, the impact of five match-fixing scandals of Chinese Professional Baseball League (CPBL) on the stock abnormal returns of parent company and sponsor was examined. Secondary data collected from the data base of CTMONEY was compared results of match-fixing scandals in the CPBL to determine whether the match-fixing scandals could be regarded as a symbolic message leading to diminish the average abnormal returns of the parent companies and sponsors. The results showed that not all occurrences of CPBL match-fixing scandals negatively impacted the abnormal returns of the parent companies and sponsors. The findings can help professional sports operators and sponsors understand the implications and spillover effects of negative professional baseball incidents on stock returns.