The Economic Impact of Formula 1: Portuguese Grand Prix

Abstract

Sport can be an important catalyst in generating economic value for regions, particularly through the organization of so-called mega sporting events like Formula 1 Grand Prix events. This paper aims to estimate the regional economic return associated with hosting Formula 1 Grand Prix events in European regions (NUTS II), from 1990 to 2023. Thus, parametric econometric models of panel data regression were estimated, reflecting the state of the art in terms of panel data regression models. These models assessed the dynamic impact on variables such as GDP, GDP per capita, employment rate, and overnight stays in the respective regions. The results of the estimated econometric models suggest that hosting a Formula 1 Grand Prix event does not bring positive economic consequences for the region in question in the four referenced indicators but instead shows neutral or, in some cases, negative effects, such as in tourism overnight stays