Guía educativa: LOS CHANGOS
PARA SABER MÁS…
The validity and reliability of data are arguably the most important factors in academic research. If the data used in any research study is not valid and reliable, then the research findings will be questionable in terms of their credibility and trustworthiness (Brink, 1993). According to Weiner (2007:7), validity is defined as ‘[t]he degree to which any measurement approach or instrument succeeds in describing or quantifying what it is designed to measure’. Weiner (2007:6) also defines reliability as ‘[t]he degree to which a measurement technique can be depended upon [sic] to secure consistent results upon repeated application’. The validity and reliability of data in this research study will be discussed in more detail in sections 3.7.1 and 3.7.2, respectively.
3.7.1 Validity of measurement
The research hypotheses for this event study will be either rejected or not rejected based on the CARs (either significant or insignificant) that will be calculated for each of the four home- based sponsor companies. Many researchers (Li, 2007; Wienand, 2007; Clark et al., 2009; Kim, 2010; Mlonzi et al., 2011) have all tested (either rejecting or not rejecting) their research hypotheses based on significant or insignificant CARs which were estimated during their research studies. Therefore, the use of CARs to answer the research question in this study will be valid.
3.7.2 Reliability
This research will use an event study approach to examine the impact of specific event dates associated with a FIFA World Cup™ soccer tournament on the share price movement of the four home-based sponsor companies. Sitthipongpanich (2011) explains that the event-
- 67 - study methodology is a reliable research process for investigating the impact of an event on stock market or share price reaction.
In order to ensure reliability of data, all measurement parameters across all event dates and FIFA World Cup™ soccer tournaments for each country will be standardised. The same- length estimation windows and event windows will be set for all four home-based sponsor companies. As described by Gong (2009), the use of the same-length event windows will allow for reliable comparison between data sets.
Findings for this research study will be applicable only to the sample selection (i.e. the sample under consideration) and not the total population (i.e. all sponsor companies of the FIFA World Cup™ soccer tournaments). Thus, generalisations regarding the impact of the event dates on the share price movement of all sponsor companies which have sponsored the FIFA World Cup™ soccer tournament will not be made.
In order for this research study to be replicated, one would need to follow the steps listed below in chronological order:
1. Determine the exact sponsorship announcement date as well as the hosting (start) date for each FIFA World Cup™ that will be examined.
2. Determine an appropriate estimation-window period as well as the different-length event-window periods once step 1 has been completed.
3. Collect the relevant data (historical share prices of home-based sponsor companies) needed.
4. Calculate the actual share returns by transforming the share price data into share returns.
5. Calculate the normal share returns (share returns that the sponsor company experienced before the actual event took place).
6. Calculate the abnormal returns (actual share returns – normal share returns) for both the estimation-window period and the event-window periods.
7. Estimate the cumulative abnormal returns (CARs) for each home-based sponsor company (plotting the abnormal returns for the different-length event-window periods that are investigated).
8. Test whether the estimated CARs are significant or insignificant and determine whether the specified research hypotheses can be rejected or not rejected.
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3.8 Ethical considerations
Ethics in research is concerned about what is correct and what is incorrect in the conduct of research (Stern & Elliott, 1997). In this research study, the most important ethical consideration will be the collection of data. The secondary data (historical share prices) will be gathered from reliable sources which are available to the public. Therefore, based on the above facts, there are no ethical concerns for this event study.
3.9 Confidentiality
Confidentiality in research refers to providing anonymity for organisations or individual participants who assist the researcher in gathering the data (either primary or secondary) which they require (Saunders et al., 2009). This research study will not require the participation of any organisations or individuals in terms of collecting data and as a result confidentiality will not be a concern for this study. All the share price data that will be collected for the four home-based sponsor companies is publically available information and hence no company confidential information will be disclosed.
3.10 Limitations
There will be three limitations in this event study. The three limitations are listed below: 1. The availability of information will be a limitation in this study. Information regarding
the official sponsors of the FIFA World Cup™ soccer tournaments prior to the 1982 FIFA World Cup™ soccer tournament is not available, hence the target population for this study will consist of only 13 home-based sponsor companies. Furthermore, sponsorship announcement dates of FIFA World Cup™ soccer tournament sponsors prior to and including the 1994 FIFA World Cup™ soccer tournament are not available. Thus, only four home-based sponsor companies out of a potential 13 home-based sponsor companies (the home-based sponsor companies of a FIFA World Cup™ soccer tournament from 1982 to 2014) will be selected.
2. The second limitation in this study will be the concept of analysing the impact of share prices based on the occurrence of a single event (the sponsorship announcement date or the hosting (start) date of a FIFA World Cup™ soccer tournament). That being said, there are other factors in the financial market which
- 69 - could potentially influence the movement of a share price. Thus, movement of share prices for the four home-based sponsor companies in this study will not be fully attributable to the fact that they are sponsoring a FIFA World Cup™ soccer tournament. Political actions in a local country, changes in commodity prices, exchange rates, interest rates, financial market crises (i.e. the 2008 financial crisis) and global market sentiment are some examples of factors which can influence the movement of share prices.
3. The last limitation in this study is that conclusions for this study cannot be generalised to all sponsor companies which have sponsored a FIFA World Cup™ soccer tournament. Saunders et al. (2009) explain that generalisations about populations can be made only if a probability sampling technique was implemented as these generalisations are based on statistical probabilities. The fact that this study will implement a purposive sampling (non-probability sampling) technique will not allow for findings to be generalised to the total population (i.e. all sponsor companies which have sponsored a FIFA World Cup™ soccer tournament).
3.11 Summary
This chapter provided a detailed discussion of the research model specifications which will be used to answer the research question in this study. This chapter also established that implementing a quantitative research design within a positivist research paradigm will result in the most accurate research findings for this event study. Lastly, a discussion of the sample size that was established, based on the availability of data and information pertaining to the target population, was provided. The data for this study was obtained from finance websites and a financial database.
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