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Emerging economies sold on potential of sports events

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Businesses in emerging markets value the potential of big sporting events to attract investment, while developed economies remain unconvinced.

This is the suggestion in the Grant Thornton International Business Report (IBR), published to coincide with the Olympics.

The topic has been the root of much discussion in the business community, as many have questioned the real value for business in the Games.

According to the research, 74% of business leaders in Latin America believe major sporting events are important in attracting investment to their economy.

Across the BRIC nations, over half hold the same view, while fewer businesses in the EU (42%) and North America (44%) believe in the ability of big sporting events to attract investment.

Stephen Gifford, Chief Economist at Grant Thornton UK, said: “It is well known that a home advantage can improve the medal haul from major sporting competitions but the IBR research shows that it can also bring in additional investment.

“Holding a major sporting event gives an emerging economy a global shop window, allowing it to present and market what it has to offer to a massive worldwide audience.

“For more established economies, international sporting competitions are still a great opportunity, but appear to be just one element of a much bigger offensive to attract investment.

“It’s also more often the case that developed economies will have the venues, transport and technology infrastructure already in place for any major event.

“Capital investment to build new infrastructure is therefore much more limited in these economies, compared with the level of investment required in emerging markets such as China and Brazil.”

The research also indicates that business leaders in those economies that have recently held, or are soon to hold, major sporting events are more bullish about the investment they bring.

In Brazil, which is looking forward to hosting the 2014 FIFA World Cup and 2016 Olympic games, 83% of business leaders show faith in sport’s ability to deliver investment.

Similarly, in Poland, where this year’s European Championships have just taken place, 82% of business leaders show confidence.

This was posted in Bdaily's Members' News section by Tom Keighley .