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Sponsorship in the European automotive market: an Event Study analysis

The analysis, based on the event study methodology, allows to point out the impact of Sponsorship in the European automotive market. The choice of selecting Citroen and FIAT as samples for the study is due to the similar background they have. First of all, they are European companies and are competitors in the same market. Secondly, both have adopted a new marketing approach in the recent years of crisis, as, for instance, the new concept of the brand logo. Moreover, as illustrated above, they tried to enhance their images in a similar manner through contracts of new sponsorship deals with different sport teams. All these similarities are important for the analysis, in order to render the event study more reliable, allowing to set an accurate comparison and to get the most objective results. The result will plainly show if the markets react in the same way to similar events and which event will be judged as the more effective. The analysis proposed will take into account the stock market index CAC 40 concerning Citroen stock prices and the FTSE.MIB concerning FIAT stock prices. The paper will be divided into four sections: firstly a wide-range theoretical framework will be proposed focusing on the event study and sponsorship literature. In the second part the essay will deal with the methodology used in the analysis, while the third part will provide a brief overview of each companies. Finding will be shown in the conclusive part, with commentaries and possible recommendation for further researches.

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3 INTRODUCTION In the 60‟s the continuous growing amount of empirical evidence about the volatility of stock prices, which occurs around a specific event period, permitted to conceive a new way of assessing the economic outcome of diverse strategies on the financial markets. The above mention procedure is called “event study” and could be considered as one of the most famous economic method in the existent economic literature. The model assumes that “information, that is made public in the market, is liable to affect the value of one or more firms at the same time”. (Delattre 2007) The main advantage of an event study consists in the ability to isolate the effect of a particular event from those occurred in the market. An event could be a dividend announcement, a marketing strategy, a new product preannouncement and so forth. For this reason it has been used for several purposes both in the marketing and in the financial field. According to Campbell (1997), a clear evidence of the effectiveness of such a method is the implicit acceptance of event-study methodology in the U.S Supreme Court for determining materiality in the insider trading case and for determining appropriate disgorgement amounts of fraud. Nevertheless the development of such a method has been more oriented towards firms which work in the US market, hindering the extension and the knowledge outside the American boundaries. Consequently there is obviously a lack of studies conducted which take into account firms inside the European marketplace. Besides event study has been often based on a sample of specific companies in order to value the impact of the event in a well-defined group, but rarely using that information to make a comparison between companies operating in the same industrial sector. The purpose of the paper is to test and compare the eventual benefits about sponsorship contracts signed by two of the most important European automobile companies: Citroen and Fiat. Citroen is a French car automotive that was created in 1919 in Paris by André Citroen. After a strong growth during the 50‟s and the 60‟s, the French company was forced to merger with Peugeot, creating thus the group PSA.

Laurea liv.II (specialistica)

Facoltà: Economia

Autore: Gianluca Giarrusso Contatta »

Composta da 57 pagine.


Questa tesi ha raggiunto 193 click dal 18/01/2012.


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Disponibile in PDF, la consultazione è esclusivamente in formato digitale.