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Being a World Cup host is normally considered to bring a host of economic benefits.
Yet according to a new paper, the benefits of winning the cup, far outweigh those of hosting the event.
Hosting the World Cup is understood to help nations get themselves on the map of international commerce. That’s the reasoning behind Qatar spending a record $300 billion in infrastructure since winning the bid to become this year’s host, building seven new state-of-the-art stadiums as well as a new metro line, an airport expansion and several urban development projects.
Related: This Soccer Fan Token Surges 30% After France Qualifies For FIFA World Cup Finals Against Argentina
Qatar is betting on a major move to project itself as a modern and industrialized nation, separating itself from some of its Middle Eastern neighbors.
Yet there’s a cheaper way to reap the benefits of world cup exposure: winning it.
According to a recent paper by Marco Mello from the University of Surrey in the U.K., winning a world cup increases GDP growth by at least 0.25% in the two subsequent quarters after the final match is won.
Argentina is set to face France on Sunday, Dec. 18, in a final match expected to be watched by at least 14% of the world population. 1.12 billion people watched the 2018 final match between France and Croatia. A combined 3.572 billion people tuned in that year to watch at least one match throughout the competition, according to official FIFA numbers.
The increased exposure translates into “enhanced exports growth, which is consistent with a greater appeal enjoyed by national products and services on the global market after the victory.”
For Argentina, this could be a huge win. The South American country experienced 92% annual inflation so far this year, which is expected to surpass 100% in December.
The country is known for historical political and economic crises, which have led to internal struggles that prevented it from successfully exploiting its rich natural resources. Now, a drought is threatening to hamper next year’s agricultural exports, which make up the nation’s largest commodity.
For France, the boost could also be well-received. The European country is experiencing a cost-of-living crisis fueled by rising energy costs as a consequence of the Ukraine-Russia war. In 2022, the country’s economy experienced the highest levels of inflation in over three decades.
Looking at economic data from more than 30 countries since 1961 and comparing that data to winning and host teams, Mello, the study’s author, concludes that winning countries enjoy enhanced GDPs in the six months following the win, “which possibly results from the greater international appeal enjoyed by a country after winning the most renowned among the football competitions.”
Being a host, however, does not translate into an immediate economic boost, according to the paper.
“Being the host country of the FIFA World Cup does not bring any significant economic benefit, at least in the short and medium term,” writes Mello.
Photo: Courtesy of Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.