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Article

Does football sponsorship improve company performance?

European Sport Management Quarterly. 2016. Vol. 16. No. 2. P. 1-19.
Naidenova I. N., Chmykhov A. S., Parshakov P.

Research question: This paper investigates how football sponsorship influences the financial performance of sponsors. We suggest a new instrumental variable to avoid endogeneity.

Research methods: We use an instrumental variable regression framework combined with a fixed effects model. The number of tweets containing both team and sponsor names are collected to use as the instrumental variable.

Results and findings: We analyze top European leagues. Our results show that football sponsorship is more charity than commercial investment. The analysis of determinants of becoming a sponsor and sponsorship amount shows that companies owned by individuals are more likely to become a sponsor.

Implications: Shareholders should be aware of sponsorship deals, and senior management should analyze the financial assumptions of such projects carefully.