Do Mega Sporting Events Promote International Trade?

Large sporting events, such as the Olympic Games, usually end up imposing large costs on their hosts that are not nearly compensated by either the revenues earned during the event or the legacy of large facilities that are left behind. The implausibility of recovering such a sizable investment explains why economists are usually skeptical that hosting these types of mega sporting events can be profitable. However, the desire to host mega sporting events such as the World Cup or the Olympic Games is widely held by both the masses and political elites. These events may allow countries to signal that they intend to intensify their participation on the world stage, and that there may be tangible benefits of doing so.