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

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  • Jane, Wen-Jhan

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.

Suggested Citation

  • Jane, Wen-Jhan, 2010. "Raising salary or redistributing it: A panel analysis of Major League Baseball," Economics Letters, Elsevier, vol. 107(2), pages 297-299, May.
  • Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:297-299
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    References listed on IDEAS

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    1. 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 841-864, October.
    2. Erkan Erdil & I. Hakan Yetkiner, 2004. "A Panel Data Approach for Income-Health Causality," Working Papers FNU-47, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2004.
    3. Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing Causality Between Team Performance and Payroll," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
    4. repec:dau:papers:123456789/6159 is not listed on IDEAS
    5. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    6. 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.
    7. 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.
    8. 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.
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    Cited by:

    1. repec:ver:wpaper:12/2012 is not listed on IDEAS
    2. Robert Breunig & Bronwyn Garrett-Rumba & Mathieu Jardin & Yvon Rocaboy, 2014. "Wage dispersion and team performance: a theoretical model and evidence from baseball," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 271-281, January.
    3. Tao, Yu-Li & Chuang, Hwei-Lin & Lin, Eric S., 2016. "Compensation and performance in Major League Baseball: Evidence from salary dispersion and team performance," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 151-159.
    4. 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.
    5. Le Maux, Benoit & Rocaboy, Yvon, 2012. "A simple microfoundation for the utilization of fragmentation indexes to measure the performance of a team," Economics Letters, Elsevier, vol. 116(3), pages 491-493.
    6. Jye-Shyan Wang & Chih-Fu Cheng & Wen-Jhan Jane, 2014. "Buying success or redistributing payment: bidirectional causality in Korean Professional Baseball League," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(2), pages 247-260, December.
    7. Takuma Kamada & Hajime Katayama, 2014. "Team performance and within-team salary disparity: an analysis of nippon professional baseball," Economics Bulletin, AccessEcon, vol. 34(1), pages 144-151.

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