Spillover Effect of Sport Team Performance on the Value of Corporate Sponsors and Affiliated Firms

Abstract

This study examines the spillover effect of the performance of Korean baseball teams on the value of their sponsoring chaebols (large Korean family-owned conglomerates) and their affiliated firms using postseason data from the Korean Baseball Organization. We find that postseason success has a positive spillover effect on the firms affiliated with sponsoring chaebols and that the spillover effect is stronger for affiliated firms whose names incorporate the chaebol's name. Hence, this study contributes to the literature by showing the spillover effect of team performance on sponsoring chaebols from the perspective of international sports finance. We also provide managerial implications for firms that initiate new sports sponsorships as well as for firms trying to maximize media exposure by advancing to the postseason.