An analysis of economic impacts of the 2010 FIFA World Cup™ in South Africa

Abstract

Mega-sport events have the capacity to deliver significant benefits – both tangible such as additional expenditure by visitors and intangible such as the influence on a nation's pride, sport profile and participation. The 2010 FIFA Soccer World Cup hosted by South Africa was expected to present enormous material and non-material benefits for the development of the country. As South Africa is a small open economy, which relies heavily on foreign investment and trade, this study investigates the economic impact of 2010 FIFA World Cup and the interrelationship between tourism and trade by focusing on 1) retail trade, 2) tourism and 3) economic legacy of the event. Using monthly data obtained from Statistics South Africa and simple regression estimates, it explored the commonly accepted assumption that mega sport events bring large and lasting economic benefits. The results suggest that there is a significant positive relationship between the FIFA Soccer World Cup and retail trade, but there is no strong impact on tourism caused by the event. These findings are discussed with reference to economic expectations on hosting mega sport events.