Economic Impacts of World Cup

 The emergence of the World Cup competition goes back to 1930 and its primary aim is to select the world’s best soccer team. The Cup is regularly held every four years on the years opposite of the Olympics with the idea of avoiding competition with the Olympic Games not only for the participants but for the fans as well. The teams representing 32 nations constitute the tournament. The participants are chosen on the basis of regional competitions; at this, each region is assigned a separate number of spaces depending on the number and quality of the teams of the same nation in the area. The 2002 Cup saw the competition between 193 nations which in 777 qualifying matches contested for a total of 32 spots in the finals.

FIFA, the governing body for soccer worldwide, determines the site of the World Cup. Until 1994, the tournament alternated between Europe and Latin America, the traditional powerhouses of soccer. Motivated by a desire to promote the sport and to capitalize on surging soccer popularity elsewhere in the world, FIFA has recently designated host countries outside Europe and Latin America. The United States of America welcomed the participants and hosted the tournament in 1994. While the event returned to a traditional soccer nation in 1998, France, in 2002 Japan and South Korea were designated as co-hosts for the Cup.

The World Cup can turn out to be beneficial for the economy of the country which hosts the tournament. Before the Cup finals begin, countries often undertake publicly financed capital improvement projects to prepare a country for the entry of the games. Examples include new or improved stadiums or road construction (Sturgess, 2007). Private companies are not left behind. They also work to expand capacity in advance of the World Cup. They do so through expansion of their accommodation such as increasing the number of hotel rooms for visitors.

In the World Cup year, host countries might receive an influx of tourists who travel to view the games although this might be offset somewhat by other tourists who don’t visit in order to avoid the hoopla. Still, soccer tourists can mean potentially millions of dollars in additional sales for locals businesses, including hotels, restaurants, and souvenir shops.

In addition to a potential impact on host countries, there could also be a champion” effect, where the country that wins the World Cup could receive a psychological boost from being crowned world champions in the world’s largest-viewed sporting event. The boost might come from either internal sources, such as a surge in consumer or business confidence, or from external sources, such as increased tourism.