A note on the endogeneity of the pay-performance relationship in professional soccer
Torgler and Schmidt (2007) have recently found a positive impact of pay on player performance in German soccer, measured by the number of goals and assists scored within a season. This note shows that their result is spurious as both a player's wage and goal/assist scoring are driven by individual playing abilities. Holding the (unobserved) time-invariant and the varying talent of a player constant, the positive pay-performance link is no longer statistically significant. In professional soccer, wages seem to buy talent rather than motivation.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
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- Egon Franck & Stephan Nüesch, 2007.
"Wage Dispersion and Team Performance - An Empirical Panel Analysis,"
0073, University of Zurich, Institute for Strategy and Business Economics (ISU).
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