An econometric analysis of the economic and social determinants of sporting success in the olympic games

Sporting success at mega-sports events elevates countries to the forefront of international media, increasing their prestige and recognition. While high-income countries aim to increase their international sporting success by allocating a larger share of their budgets to sports, low- and middle-income countries are unable to make the necessary investments in sports and achieve the expected sporting success due to macroeconomic challenges, particularly high inflation. This study investigates the impact of economic development on sporting success at the Olympics. The analyses included 39 countries that won at least one medal at the Summer Olympics held between 1996 and 2020, classified by their economic development levels. In addition to inflation, population, and temperature controls, a dummy variable for hosting the Olympics was included in the econometric models. The analyses employed dynamic panel data analysis methods, including the Arellano-Bond Two-Stage GMM, Arellano-Bond Two-Stage GMM (Robust Standard Error), Arellano-Bover/Blundell-Bond Two-Stage System GMM, and Arellano-Bover/Blundell-Bond System GMM (Robust Standard Error). The results indicate that past sporting success, economic growth, and home advantage increase the number of medals in high-income countries. In low- and middle-income countries, the negative impact of economic growth on sporting success suggests that these countries direct their resources to higher priority areas.