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Has Japan really benefitted economically as a result of the World Cup 2002?

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Introduction

Bill Bradbury Q. Has Japan really benefitted economically as a result of the World Cup 2002? Introduction From the 31st of May until June 30th, Japan & Korea hosted the World Cup in which 32 teams competed to be crowned football champions of the world. Many thousands of people watched the matches live and hundreds of millions worldwide watched on T.V. The World Cup has been the most popular sporting event ever since the 1930s when Uruguay hosted and won the first ever World Cup. Since then the World Cup has been hosted every four year in different countries apart from during World War 2 and there have been 17 World Cups. Since the 30s football has became the world's most popular sport and with the introduction of commercial air flight, motorcars and the global T.V network it has become an important source of revenue. In 1994 the World Cup was hosted in the USA and a record 3,587,530 people watched it live. Since the 1986 World Cup held in Mexico the total attendance had begun to rise to over 2 million live viewers a World Cup. This would result in host countries gaining massive revenue from ticket sales and money received from the T.V companies broadcasting the match. The rights for broadcasting the 2002 World Cup were bought for �622 million by Kirchmedia showing just how valuable World Cup football is. Also a study by HSBC securities in 1998 showed that countries which hosted the World Cup after 1966 saw their respective stock markets do better on average by 9%, 6 months prior to the tournament. However the study also showed that 6 months after the tournament most markets under performed by an average of 6%. In 1998 Japan was chosen to joint host the World Cup with South Korea and began a vigorous development project to upgrade and build good quality stadiums, improve public transport, build more hotels and create an excellent security force for the games. ...read more.

Middle

First of all the cameramen will need to be trained in order to record the match and Japanese commentators found to give their views on the match to the public. So people in the football and TV roles will receive additional income from the 30 days of football played around the country. Also inside the stadiums a large number of billboards will be bought and used in order to advertise local companies and before the build up of the match and half time adverts will also be broadcasted to viewers watching from home in large numbers. For example if a local company is advertising on the billboards and by TV its name will become better known with the Japanese public. When people are shopping they will recognise the name and buy the product even though they might not need it. The effect of advertising is that it shifts the demand curve to the right therefore increasing sales of a particular product. If sales increase beyond the cost of the advertising then the company and its employees will benefit from the increased profit and this will benefit the economy. Wages will be forced up and the company's profits increased, allowing the company to advertise regularly and keep its popularity and sales high. As we can see from fig 4, By Advertising Coca-Cola during the World Cup the demand for Coca-Cola increases from D1 to D2. Supply of Coca-Cola cans then increase from Q1 to Q2 and this allows the firm to raise prices from P1 to P2. 3) Marketing opportunity to attract tourism and new business in the future. One of the main reasons the Japanese Government wanted to host the World Cup was to encourage more European and American firms into its country. By doing this they could lower unemployment and force wages to increase competitively. It is hoped that visions of Japan's culture, infrastructure and its well organised hosting of the World Cup would attract well renowned international firms to move to Japan. ...read more.

Conclusion

The Yokohama international sports stadium has a capacity of 70,000 and according to Mr Gratton since it's construction in 1997 it hadn't even been half filled before the World Cup. The up keep of these stadiums will run into many millions of Yen that some of which the small Japanese clubs may have to pay. Despite these flaws I believe my report was broadly correct and I conclude that the World Cup benefited the Japanese economy at a time of depression. As we can see in the table above the World Cup created a massive 77,686 jobs and over $290 billion was generated. Also $160 billion was added onto the value of stocks and shares in Japan. Thanks to the increased consumer spending, increased firm output, urban development, tourism, excellent facilities, better infrastructure, rising wages and more tax income the Japanese economy has grown. Future analysis predicts an estimated $12 billion in production and job gains alone. If we look at the diagram below we can see that Japans Production Possibility Boundary increases from CI to XY as a result of increased investment from the government and growing consumption from Japans public. Japans economy also shifts from R to W as a result of these factors. If I was going to make any further investigations into the effect of the World Cup on Japan's economy I would wait until 2006 and review if tourism had increased on average since the World Cup had started. I would also check whether the attendance's and season ticket sales of the Japanese football clubs had increased overall and by how much. During this investigation my sources were via the Internet from: Guardian Unlimited; BBC News; Observer and soccerphile.com. Contents Page Page 1 - Introduction Page 1, 2 - Economic Concepts Page 2,3,4 - New sports facilities and associated amenities Page 4,5,6 - Short term economic stimulus from spending during World Cup Page 6,7 - Marketing opportunity to attract tourism and new business Page 7,8 - Urban development Page 8,9,10 - Evaluation and Final Conclusion I I ...read more.

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