Managerial Contribution to Firm Success: Evidence from Professional Football Leagues

Previous research in economics and management finds significant heterogeneity across senior managers in their contribution to organisational success. It remains, however, challenging to disentangle the impact of managers from that of other inputs, such as labour, due to limited data availability in many general organisations. In contrast, individual workers (players)’ performance and their characteristics are publicly available in professional football leagues. Therefore, this study employs data from the industry to estimate individual managers’ contributions to field performance, given the resources at hand. To measure a club’s output, we adopt expected goals, which are less influenced by randomness than conventional measures. Controlling for players’ quality based on their historical performance as well as a club’s financial strengths, we yet find significant impacts of managerial inputs. In addition, we compare our estimated manager coefficients with a more naive measure of managerial performance, such as winning percentage. This highlights the importance of taking into account the differences in resources that a manager has at his disposal as well as the randomness of the outcome when evaluating a manager’s performance.