The Olympic effect revisited: 1950–2019

Rose and Spiegel (2011) identified a positive trade-promoting effect of hosting the Olympic Games, yet they did not account for multilateral resistance terms in their analysis, which are emphasized in the structural gravity model by Anderson and van Wincoop (2003). This paper revisits the trade effects of the Olympics using a nonparametric matching method developed by Chang and Lee (2011), analyzing a comprehensive gravity dataset encompassing 187 economies from 1950 to 2019. Our findings suggest that hosting the Olympics is positively associated with bilateral trade. For pairs in which both countries have hosted, the matching estimate corresponds to a long-run trade difference with an implied increase of approximately 15 times relative to matched nonhost pairs. Under an assumed trade elasticity of 4, this estimate corresponds to an illustrative trade-cost equivalent of approximately 50%.