Race to Return: An Event Study of Race Performance and Share Price Reactions

Abstract

This thesis investigates the relationship between race performance in Formula One and the immediate stock price reaction of the companies involved. Using event study and regression analysis, we examine the effect of race results on the abnormal returns of eight different companies. Our results show that race performance does not have an immediate statistically significant effect on abnormal returns. We also find that winning the Driver's Championship and Constructor's Championship does not lead to positive abnormal returns for companies associated with the winning team. Our findings suggest that companies do not add immediate shareholder value by their performance in Formula One.