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Raising salary or redistributing it: A panel analysis of Major League Baseball

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  • Jane, Wen-Jhan
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    Abstract

    Using data in Major League Baseball (MLB), this article conducts Panel Granger Causality tests for teams' salary structures and corresponding performance. The results show that a reliable way to enhance performance is to compress salaries rather than to enlarge the payroll.

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    File URL: http://www.sciencedirect.com/science/article/B6V84-4YH567M-3/2/346fd77024037edb1f71f02f1fdc6d38
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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 107 (2010)
    Issue (Month): 2 (May)
    Pages: 297-299

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    Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:297-299

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Equity theory Panel Granger Causality test Revenue sharing Salary regulation Tournament theory;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing the Causality between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
    2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
    3. Saumitra N. Bhaduri & S. Raja Sethu Durai, 2006. "Empirical relationship between the dividend and investment decision: do emerging market firms behave differently?," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 2(3), pages 155-158, May.
    4. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
    5. Wen-Jhan Jane & Gee San & Yi-Pey Ou, 2009. "The Causality between Salary Structures and Team Performance: A Panel Analysis in a Professional Baseball League," International Journal of Sport Finance, Fitness Information Technology, vol. 4(2), pages 136-150, May.
    6. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    7. Venet, Baptiste & Hurlin, Christophe, 2001. "Granger Causality Tests in Panel Data Models with Fixed Coefficients," Economics Papers from University Paris Dauphine 123456789/6159, Paris Dauphine University.
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    Cited by:
    1. Robert Breunig & Bronwyn Garrett-Rumba & Mathieu Jardin & Yvon Rocaboy, 2012. "Wage dispersion and team performance: a theoretical model and evidence from baseball," CEPR Discussion Papers 663, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. BenoƮt Le Maux & Yvon Rocaboy, 2011. "A simple microfoundation for the utilization of fragmentation indexes to measure the performance of a team," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2011-02-ccr, Condorcet Center for political Economy.
    3. Kniffin, Kevin M. & Mihalek, Vince, 2014. "Within-series momentum in hockey: No returns for running up the score," Economics Letters, Elsevier, vol. 122(3), pages 400-402.
    4. repec:ver:wpaper:12/2012 is not listed on IDEAS

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