Estimating economic regional effects of Euro 2012.

In 2007 Poland and Ukraine were awarded by UEFA to co-host the 2012 European Football Championships. This first "mega-event" to take place in the transition countries is commonly intended to yield large and lasting economic bebefits to the host cities. This point of view is rarely shared by economists, who are aware of misuse of economic impact estimates. In this paper, we modify the Keynesian-style multiplier model to investigate the effects of Euro 2012-related spending on local economies. Our goal is two-fold : on the one hand, we can easily investigate the impact on each demand component, on the other hand, we wish to calculate the magnitudes of these multipliers in order to judge the credibility of potential regional welfare benefits. This analysis is strenghtened by taking into account the regional supply constraints. Our study also reviews the existent body of work on mega-sporting events and our results are in line with those researches who argue that the true economic impact of these competitions is overestimated by a large margin. Finally, we stress the organizational and institutional dimension of hosting a "mega-event" by the transition and developing countries that are constantly struggled to tackle the colossal tasks of upgrading stadiums and modernizing airports, rail and road networks and hotels.