Cricket, colonialism and the capital market: winning does not matter but losing hurts

Abstract

There is increasing evidence of the inadequacy of National1 explanations of asset-pricing. It has been established empirically that mood, induced by such natural phenomena as lunar phases or sunshine, affects asset prices. This paper provides evidence, from one-day cricket international (ODI) matches played by India, that there is a significant negative impact on the daily stock market returns when the national team loses. Empirically, losing in India matters somewhat more than losing outside. The mood induced by losing a match appears to conditioned by history, in that losing to nations that represent the 'colonizers' matters but not losing to nations that share India's experience of being 'colonized'.