This paper is the first to study the effects of hosting Olympic Games on regional economic output beyond population dynamics.
For identification, runners-up in the Olympic bidding process are used to construct the counterfactual for Olympic host regions.
In the short run, hosting Summer Olympics boosts regional GDP per capita by about 3 to 4 percentage points relative to the
national level in the year of the event and the year before. There is also evidence for positive long-run effects, but results
on the latter are not statistically robust. In contrast, Winter Olympics do not have a positive impact on host regions. If
anything, they lead to a temporal decline in regional GDP per capita in the years around the event.