working paper no 1 signaling beijing 2008 091123

8/3/2019 Working Paper No 1 Signaling Beijing 2008 091123

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Working Paper Series

Mainzer Papers on Sports Economics & Management

#1) The Perception of the 2008 Beijing Olympic Games in Chinaand the World (November 2009)

HOLGER PREUSS (corresponding author)Institute of Sport Science

University of Mainz

Albert-Schweitzer Str. 21

55099 Mainz, Germany

Email: [email protected]

Abstract

This paper provides an analysis on internet news reports about the Beijing Olympic

Games 2008. We focused on how China signaled throughout the Olympics to internal

and external target groups. The analysis shows how the cultural areas “China”,

“USA”, “Europe” and the “Rest of the world” perceived the Games. The results were

interpreted regarding, firstly, the principal agent theories' signaling to reduce

information asymmetry for business and tourism and, secondly, costly signaling to

generate symbolic capital.

740 news reports were collected between July 1st and September 30th 2008, using

“Google Alerts” with the keywords “Olympic Games Beijing 2008”. The reports were

analysed with a quantitative content analysis using a coding frame. The results show

that China used the Games to signal towards target groups, primarily to potential

business partners/investors. The four cultural areas observed have different patterns

on how communication about the Olympics was perceived in their media reports.

However, Chinas success to signal positively was weakened by several negative news

reports.

Faculty of Social Science, Media and Sport

Institute of Sports Science

Johannes Gutenberg-Universität Mainz

Saarstr. 21

55099 Mainz

Germany

CHRISTIAN ALFS

Institute of Sport Science

University of Mainz

Albert-Schweitzer Str. 21

55099 Mainz, Germany

Email: [email protected]



ii

Table of Content

1. Introduction........................................................................................................... 1

2. Literature Review.................................................................................................. 2

3. Theoretical considerations and framework............................................................. 5

4. Methodology and Research Design........................................................................ 7

5. Results................................................................................................................. 10

6. Conclusion .......................................................................................................... 14

7. References........................................................................................................... 15



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1. Introduction

The investment of taxpayers´ money for Olympic Games often relies merely on fiscal

growth externalities. However, due to the transitory nature of the directly induced

economic impact by Olympics (Preuss, 2007a), there is ongoing controversy whether

the monetary impact is positive for the host city (Matheson, 2009; Heisey, 2009;

Baade & Matheson, 2004; Késenne, 1999; Crompton, 1995; Getz, 1994). A broader

consensus among these authors seems to exist about the intangible factors induced

by staging mega sport events (Szymanski, 2002, 9). The most prominent intangible

effect of Olympics is the “free” promotion effect for the location (Chalip & Costa,

2006; Preuss, 2007a; Ritchie & Smith, 1991) and the non-use values such as thepopulations’ happiness and national pride (Barget & Gouguet, 2008; Bruni & Porta,

2007). Consequently, major sport events may be perceived primarily as a public

investment in the regional image and, thereby, be used as a signaling tool for the

host as, for example, a business location and tourism destination, aiming at the

reduction of informational deficiencies with regard to potential investors and

visitors. The economic impact closely related to the event is rather a side effect than

the very goal and legitimacy of subsidies (Kurscheidt, 2007). Moreover, regional

development strategies should not be focused on just one event as the policy

intervention. Rather, bundling different events into a portfolio and embedding them

into a broader strategy of place marketing and economic growth should lead to long-

term development success (Gratton, Shibli, & Coleman, 2005; Chalip, 2004; Gratton,

Dobson, & Shibli, 2000;). The potential role of an effective signaling to support such

endeavours is therefore of high interest.

The intent of this study is to find out how China and Beijing used the 2008 Olympic

Games in Beijing, which were staged from August 8th

to 24th

, to signal towards

internal (national) and external (international) audiences. Additionally, we evaluated

how the perception of these Chinese Olympic Games in the Chinese media differed

from European media, US-American media and media from the rest of the world.

Therefore, we collected Internet news articles about the Beijing Olympic Games

using the “Google Alerts” tool over a period from July 1st to September 31st 2008.



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Furthermore, we distinguished between positive and negative internet-news reports

from different regions (China, USA, Europe and others) to detect whether different

cultural zones reported differently about the Games and thereby educated their

population differently by the Internet news reports.

2. Literature Review

For this paper we will use two signaling theories to show how China used the

Olympic Games in Beijing to signal information to target groups, particularly tourists

and decision makers of international corporations.

This study is based on content analysis of Internet news reports about the Olympic

Games 2008 (Krippendorff, 2004; Berelson, 1971). However, the intention is not to

analyse the content in terms of sport coverage or the organizational progress, but

the information produced about China as a potentially interesting place for tourists

and foreign direct investments. Furthermore, we intend to look at the overall public

relations the communist party of China was doing throughout the Games.

In the past some research was done on media content analysis of Olympic Games

(Moragas Spà, Rivenburgh, & Larson, 1995; Schantz & Gilbert, 2001), however, we

could find only a few research proposals on Beijing 2008 (Bladen, 2008; Finlay & Xin,

2008; Horne, 2008; Luo et al., 2008), with none of them concentrating on signaling.

The special focus on signaling through a mega (sport) event is not new. Due to the

great worldwide interest in the Games and the “media hype” (Preuss, 2007b)

Olympic Games provide an important public relations opportunity. In earlier times

one motivation to stage the Games was to demonstrate the superiority of a political

system. The communist regimes of the 1970s and 1980s as well as the German Reich

in 1936 saw the Games as a chance to prove the superiority of their systems

(Riordan, 2007; Riordan & Arnaud, 1998; Krüger, 1972). More recently, the

motivation has been to announce or demonstrate major changes in the host city and

country to the world. For example, Munich wanted to show that West Germany had

rid itself of its Nazi past (Guttmann, 2002; Daniels, 1996). South Korea wanted to

showcase its modern, high-technology national industries and replace its image as a



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developing country (Denis, Dischereit, Song, & Werning, 1988). Australia used the

Games to enhance the tourist image of Australia as a whole and not just of Sydney

(Morse, 2001) and was keen to raise its international profile as "being more than

merely a good source for raw material" (Parker, 2001, 9). Finally, Beijing was keen to

demonstrate the growing importance of China to the world economy by delivering

'High-Tech Games' (Lin, 2004) as well as to demonstrate it’s great cultural past,

which is interesting for tourism.

Signaling is used in many fields and aspects of life. It refers to sending out signals to

convey information about unobservable qualities of the sender in order to minimize

the information asymmetry or to accumulate symbolic capital.

There are many disciplines of science using signaling theory, such as information

economics (Jensen & Meckling, 1976; Rothschild & Stiglitz, 1976; Spence, 1973;

Akerlof, 1970), business and marketing (; Cai, Duxbury, & Keasey, 2007; Boulding &

Kirmani, 1993), anthropology, biology and evolutionary science (Palmer & Pomianek,

2007; Bliege-Bird & Smith, 2005; Getty, 2002; Cronk, 1994; Nur & Hasson, 1984;

Zahavi, 1975) and sociology (Veblen, 1994 [1899]; Bourdieu, 1977; Mauss, 1924).

Out of these different approaches to signaling, we will focus specifically on two

signaling theories. First, we draw parallels to the reduction of information

asymmetry such as used in the principal-agent-theory by Spence (1973) who firstly

explained the theoretical framework in his job market-signaling example. Second, we

will draw attention on the costly-signaling theory developed in particular in

anthropology and sociology (Veblen, 1994 [1899]; Bourdieu, 1977; Zahavi, 1975).

Signaling theory is an essential part of the principal-agent-theory described by

Jensen & Meckling (1976). A fundamental aspect of the principal-agent-theory is the

information asymmetry between a better-informed agent and a less-informed

principal. The principal does not exactly know the intention and the motivation of

the agent. Agent and principal have an overall common aim, however the agent does

not only want to maximize the principals benefit, but also his own. Due to the

hidden characteristics of the agent during the selection the principal may choose

agents with suboptimal characteristics. This management problem is called "adverse

selection". In order to decrease the information asymmetry, either signaling,



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screening or self-selection can be used. In the signaling approach, the agent can send

signals to convey otherwise hardly observable qualities and information to the

principal and thereby lowers the probability of an adverse selection. However, it is

only beneficial for the agent to produce a signal if the advantage of the production

of signals is greater than the costs to produce it, while the opposite is true for the

competitors (Picot, Dietl, & Frank, 2005), which is also called a separating

equilibrium (Spence, 1973).

Another type of signaling theory is the costly-signaling theory. Whenever the

communication is not based on a fact but on overall public relations messages such

as showing the superiority of a political system, the strength of a country or its

development, often costly-signaling can be observed. Not much general research is

available regarding costly-signaling throughout mega sport events. Clausen (1997)

first mentioned a kind of event signaling as a strategy to use cultural events to signal

information about a place. Kurscheidt (2006, 2009) and Preuss (2007a, 2007b) later

investigated sport-event signaling in greater detail. Garcia (2007) also focused on

Olympic Games signaling, but rather indirectly only on the production of cultural

symbolic capital.

This costly-signaling theory was first mentioned by Veblen (1994 [1899]) and first

published in the context of theoretical biology by Zahavi (1975). Also being called

"handicap principle", this theory describes the use of costly signals, which are

supposed to be hard to imitate because of inherent signaling costs, to reliably

convey information about the sender. The sender has to invest significantly into

these signals and the less they are of use the more trust-worthy they are. An

example from biology for costly signals are large antlers on deer, which are hard to

maintain and can be seen as a potential risk to the owner. So, being able to maintain

such large (not useful and therefore risky) antlers signals eligibility for being a

potential mate or ally (Palmer & Pomianek, 2007). Veblen (1994 [1899]) and

Bourdieu (1977) illustrate costly signaling by saying that conspicuous expenditures

are an ultimately strategic action designed to build up and accumulate symbolic

capital. Thereby, the highest profits in symbolic capital can be attained when



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someone acts in ways that reliably demonstrate lack of interest in material

acquisition by engaging in conspicuous consumption and therefore lavish spending.

3. Theoretical considerations and framework

The theoretical considerations about the framework of our study are described in

Fig. 1. Deeper detail and description on the framework can be found in Preuss

(2007b, 79-82).

Fig. 1: Flow of information about the Olympic Games throughout national and international

media

Source: Preuss (2007b, 80)

The Chinese government, consisting of the ruling Communist Party (CP), has control

over the organizing committee of the 2008 Beijing Olympic Games (BOCOG) and

constitutes the interior politics, providing great influence on the organization of the

Beijing Olympic Games themselves. The CP also has control over the Chinese media.

Signaling Chinas power, unity, self-confidence and other content created potential

conflict with the interior and exterior political environment. These factors effect the

Focus of this

stud

Olympic Games

Beijing 2008(Spor t & Message)

Location Factors

SignalingInfo Asymmetry

InternationalMedia

Communist Party China (CP)

Symboli c Capital

CostlySignaling

Exterior Politics

BOCOG

Interior Politics

NewsReports

NationalMedia

International Audience(Poli ti cians, Investors, Tour ists)

NewsReports

Control

Collective Memory

National Audience(Investors, Population)

negati ve

positive positive

Control

negati ve



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realization and the conducting of the Olympics, also influencing the messages sent

by them.

Chinese and international media reported on the Games. Negative news from

Chinese media were basically blocked and not published, at least for the most part.

In China, the governmental news agency Xinhua is exclusively responsible for

permission and distribution of information from abroad. “Media companies that

want to sell information and images to China have to censor themselves and are not

allowed to deliver news which ’…endanger Chinas national security, reputation and

interests…’. Beyond that and according to the vague regulations, pieces of

information are not allowed, that ’…endanger the economic and social order…’ or

that ’…endanger the social stability…’. Similar regulations apply for information that

’…undermine Chinas national unity, sovereignty and territorial integrity…’” (n.n.,

2006a). The Olympic coverage for the Chinese population can be used successfully

for the internal political agenda. The positive news reports precisely meet the needs

of many Chinese people, because the Chinese public associates way more to winning

the bid to host the Games back in 2001 than just the honour of being the host.

Winning the bid comforts the wounds in the national sentiment caused by 150 years

of colonization attempts by the west, terrible attacks by Japan and not least many

self-destructive years of Cultural Revolution. By hosting the Olympic Games China

feels strong again, accepted as a global power, just the way it has seen itself for the

last 2000 years (Preuss & Guder, 2008; Seitz, 2006).

The international media reported more openly and the news outside China was not

to be controlled by the CP. However, the generally positive news on the sports was

influenced by the "collective memory" the world media has about previous Chinese

political actions and also about Chinas role at previous Olympics. The international

media compared all actions taken by the host nation regarding the Olympics to

previous actions in order to formulate their news reports accordingly. That is the

reason why messages about human rights, Tibet, doping, environment etc. were

constantly used in foreign media news.

The focus of this study, as highlighted in Figure 1, was analysing the Internet news

reports from Chinese and international media. What content was reported, to



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whom? What were the differences between the news reports from Chinese and

international media in different parts of the world?

Fig. 1 further illustrates how the national and international media were addressing

the target groups. On the one hand the positive news reports from China can be

seen as a reduction of information asymmetry (showing the strengthened location

factors of the capital Beijing and China in general) as well as the building up of

"symbolic capital" through costly signaling, e.g. by constructing the Olympic venues

in an impressing architecture much more costly than a normal sufficient venue and

way ahead of time. The positive reporting of the international media addressed the

same effects. However, the negative reporting added further information about

China. Due to the globalization the Chinese audience was also partly aware of this

reporting.

4. Methodology and Research Design

This study is based on quantitative content analysis (Krippendorf, 2004; Berelson,

1971), in our case a quantitative analysis of Internet news using a coding frame.

For the data collection we used “Google Alerts”, which is a service offered by the

Internet conglomerate Google. “Google Alerts” sends out daily emails with links to

news reports on keywords - for this study we used “Olympic Games Beijing 2008”.

Accordingly, mostly news reports in English were collected, which come either from

English-speaking areas of the globe (USA, Europe) or from sources that target an

international audience like the host China itself. This way 740 news reports were

collected over the period from July 1

st

to September 30

th

.

“Google Alerts” is a tool working with the so-called "Google PageRank-algorythm"

(Brin & Page, 1998). More precisely, "Google Alerts" uses the StoryRank-version,

sorting out those news reports on which the highest number of other web pages link

to. In other words the assortment of news reports by "Google Alerts" concerning the

content is not given because the selection is based on the links from other pages to

each news report. Therefore our analysis is not representative for the overall

content that was given by all news reports. Neither the overall number of news



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reports, nor the overall number of reports on a specific topic can be detected.

However, using "Google Alerts" we collected those English Internet news reports,

which were presumably most viewed. At least the selection of media news

represents those with the highest subjective importance and impact on the viewers.

During the time of data collection, the number of the daily news was limited to the

ten top news reports per day, with some days providing less than ten news reports.

The content of the news reports was analysed by three criteria. First, the origin of

the news reports was sorted in four geographical (and cultural) areas. We

distinguished China from the USA, Europe and the “rest of the world”. It is of interest

to identify a difference in reporting between the sender of the signals, China, and

the world power USA, the multicultural Europe with many small countries and the

"rest of the world". This last group is basically determined by news reports from

Canada (n= 75), Asia and the Middle East (n=53), Africa (n=24), Australia and New

Zealand (n=23) and South America and the Caribbean (n=5).

Second, the topics of the news reports were interpreted by their content, as

displayed in Tab. 1.

No Category Content N Category related to signaling

1 Sport Sport 303 news are logically the central

messages of the Olympics and will

not be analysed

2 Costly signaling High Tech; architecture;

great organization

24 news are related to costly-

signaling

3 Information

asymmetry:

Business

Business climate;

people; organizational

skills; security

81 news are related to reduce

“information asymmetry”

concerning China/Beijing as a

business relations4 Information

asymmetry:

Tourism

Tourism; people;

environment

30 news are related to reducing

“information asymmetry”

concerning China/Beijing as a

tourist destination

5 System critics Freedom of Press;

Human rights

47 news are related to positive or

negative criticism on the Chinese

political system

6 Others, non-

Olympic

Others and non-Olympic 263

Tab. 1.: Categories of content analysis related to signaling theory



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Category one includes information about the sport itself and is not focus of this

study. The second category consists of observation related to costly-signaling and

contains information about extraordinary state-of-the-art technology, modern

venues, impressive general infrastructure and great organisational skills of the

Chinese. These news reports are based on the costly-signaling approach, because it

was reported how China was spending enormous resources to convey information

building up symbolic capital (Veblen, 1994 [1899]; Bourdieu 1977). The third and

forth category relate to news reports narrowing the informational asymmetry to

attract tourists and to improve business relations and attract (foreign) investors.

These categories deal with the signaling providing information about given facts to a

less-informed receiver (principal), trying to bridge the information gap for otherwise

hard to attain information. The last analysed category is related to criticism on the

political system in China, which affects both China as a business and tourism

destination. A residual group contains 303 other news reports not important for the

focus of this analysis. These topic-related categories, being grouped from 27 original

and highly precise categories, meet the three criteria for coding frames, which are

precision, exclusivity and exhaustivity (Bortz & Döring, 2006).

Third, we differentiated between news reports assessing the topics in a negative way

and those doing it either in neutral or positive ways. Accordingly, news reports with

a negative judgment of it’s content, which are fairly easy to detect, are placed in the

“negative” category and the others in the “positive/neutral” category, which

provides a high degree of objectivity. Objectivity is maximised by conservative

interpretation of data - however, we must admit that we are still judging from a

European-socialised background. While the origin of the news demands no

subjective interpretation, it is more difficult with the interpretation of the content.

The collected news reports were analysed using a quantitative content analysis. The

reports are sorted according to a coding scheme, differentiating origin, content and

judgment of that content. This coding scheme can be exemplified with a sample

news report:

1) Origin: USA



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From those 182 reports analysed by category related to signaling it can be seen that

the highest percentage (43%) comes from China. The Communist Party was certainly

most interested in reducing the information asymmetry to attract future tourists and

direct foreign investments as well as using the Games to build up symbolic capital.

The other regions under consideration had only 16.7% (USA), 22.6% (Europe) and

24% (rest of the world) news reports fitting in the signaling categories.

Figure 3 illustrates the number of analysed news reports, distributed into the six

categories “Sports” (n=303), “Costly Signaling” (n=24), “System Criticism” (n=47),

“Information Asymmetry Business” (n=81), “Information Asymmetry Tourism”

(n=30) and “Others/non-Olympic” (n=263). It must be mentioned that we used 8

reports twice, because they fitted in two categories.

263

30

81

47

24

303

0

50

100

150

200

250

300

350

Spor ts Cost ly Signal ing Sys tem

Criticism

Information

Asymmetry

Business

Information

Asymmetry

Tourism

Others/ non-

Olympic

Fig. 3: Share of news reports by category

Taking a closer look at the assessment of the content of the news reports, some

facts can be observed (Fig. 4). Whereas the reports on "System Criticism" show an

overall balanced assessment of 22 (47%) positive/neutral and 25 (53%) negative

reports, it is discernible that the Chinese media published mostly positive reports on

these topics (8 positive/neutral and just one negative published in Hong Kong



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regarding prejudices against the handicapped in Chinese society). The reports from

the USA and Europe are opposite, with 33% and 15% positive/neutral.

0

5

10

15

20

25

30

35

C h i n a

U S A

E u r o p e

" R e s t "

C h i n a

U S A

E u r o p e

" R e s t "

C h i n a

U S A

E u r o p e

" R e s t "

C h i n a

U S A

E u r o p e

" R e s t "

Sys tem Cr it ici sm Cost ly Signal ing I nformati on Asymmet ry

Business

Information

Asymmetry Tourism

positive/ neutral negative

Fig. 4: Share of news reports by category, origin and value

All reports on topics related to costly-signaling were positive/neutral in their

judgement. In the categories “Information Asymmetry Business” and “Information

Asymmetry Tourism”, the results concerning the assessment are similar. All collected

news reports from Chinese sources were positive/neutral in both categories. US

media had 13 (76%) positive/neutral and 4 negative reports on business-related

topics and 6 (66%) positive/neutral and 3 negative news on topics used to reduce

the information asymmetry for potential tourists. From European media sources 5

(56%) positive/neutral and 4 negative news reports on “Information Asymmetry

Business” and 6 (86%) positive/neutral and 1 negative on “Information Asymmetry

Tourism” were collected.

While the real share of news on the Beijing Olympic Games cannot be analysed, we

can at least weight the number of reports in the different categories by their share

on all reports during the observed period. This way it can be seen what kind of

signaling pattern was most important among the mostly linked web news reports.



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Fig. 5: Reporting pattern on signaling through the Beijing Olympic Games 2008

Relatively seen Europe and the "rest of the world" were criticizing the political

system of China most, whereas only a small percentage of news reports from the

USA addressed "system criticism". More than half of all signalling-related reports

originating from China were about conveying information on business-related

location factors, which can be interpreted as the main focus of the signaling used by

the Chinese. Compared to the other origins, more US news reports dealt with “costlysignaling”, probably because of a general interest of the US-American public for



14

extravagant things. However, in general it can be seen, that the reduction of

information asymmetries in the field of business and tourism was most important in

all regions under consideration.

6. Conclusion

The Olympic Games in Beijing 2008 created many news reports all over the word.

Many of them were related to signaling in all three analysed contexts (costly

signaling, info-asymmetry business & tourism).

This paper illustrated that Mega Sport Events, such as Olympic Games, can be used

by the host to signal towards interior and exterior audiences. As seen in Fig. 5,

where, for example, the host China used the world-wide media coverage to convey

information on business-related location factors to potential internal and external

investors. This is not new for Mega Sport Events. Being on the stage of the world

media, signaling regularly is used by "free riders" trying to use the media hype to

reduce information asymmetries, which are not related to the Olympic Games. In

China that was related to Tibetan conflicts as well as the attacks of the Olympic

Torch Relay just in order to criticise the Chinese politics. This abuse of the Olympic

media hype was also observable in Sydney 2000, where there were many reports

published on the treatment of Aborigines or in Atlanta 1996, where news reports

about the situation of the black population were communicated.

Its effectiveness for China and Beijing has to be determined more closely, since

negative news reports dampen the effect of the positive ones. It could be shown

that the effects of signaling efforts can also be negative, since international media

cannot be controlled by Chinese authorities. China must have been anticipating this

outcome. However, our results show that the positive news outweighed the

negative news reports. It is in particular to be seen that even the reports on "system

criticism" were more positive than negative in the "rest of the world".

The perception of the Beijing Olympic Games 2008 differed between the regions

“China”, “USA”, “Europe” and the “Rest”, with Europe and the “Rest” reporting in a



15

quite different way about China. All concentrated mostly on transmitting business-

related information.

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