Do mega sport events create international economic activity in the host country?

The major objective of this study is to investigate whether the level of international economic activity (foreign direct investment, economic growth, international trade) can be better predicted if a country is hosting a Mega Sport Event (MSE). This study investigated the Summer Olympics and the FIFA World Cup over the past 20 years. The main question to answer is if the level of international economic activity will increase for the host country of an MSE. The results reveal that the overall foreign direct investment (FDI) inflows of all rubric MSEs will increase for the host country after the MSE took place. However, results are different depending on what kind of country is hosting the MSE. The level of FDI inflows will increase for developed countries but will decrease for emerging markets, for instance South Africa. The overall level of economic growth of all rubric host countries will decrease if a country is hosting an MSE. This result is the same for developed and emerging markets. Finally the overall level of international trade (import and export) of all rubric MSEs will increase for the host country after the MSE took place. But also for this result there is a difference between host countries. The level of international trade will increase for developed countries and will decrease for emerging markets, for instance China. On the basis of the results of this study, it can be concluded that the overall level of international economic activity will increase if a country is hosting an MSE.