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The Effects of Institutional Change in European Soccer


  • Haan Marco


  • Koning Ruud

    () (Department of Economics, Econometrics, and Finance, University of Groningen, P.O.Box 800, 9700 AV Groningen, the Netherlands)

  • Witteloostuijn Arjen van

    () (University of Antwerp, Faculty of Applied Economics, Antwerp Centre of Evolutionary Demography, Prinsstraat 13, 2000 Antwerpen, Belgium)


The last decades have seen two profound changes in European soccer. First, international trade in talent has increased markedly. Second, international competitions such as the Champions League have become much more important. Using a theoretical model, we study how these changes affect competitive balance within national competitions, and quality differences between national competitions. Introducing international trade in talent leads to a flow to large countries, as the returns to talent are higher there. Wages increase in small countries, but decrease in large ones. The wage increase in small countries hurts small teams more than large ones. Therefore, competitive balance decreases. The wage decrease in large countries benefits small teams more, so competitive balance increases. The introduction of a Champions League implies the possibility to win a large amount of prize money. This is relatively more important for small teams. Hence, competitive balance increases in all countries, and talent flows from large to small countries, provided international trade is possible. Wages increase. When looking at both changes combined, we find that talent flows from small to large countries. Hence, in this sense, the trade effect dominates the Champions League effect. Competitive balance increases in all but the very smallest countries.

Suggested Citation

  • Haan Marco & Koning Ruud & Witteloostuijn Arjen van, 2012. "The Effects of Institutional Change in European Soccer," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(3), pages 318-335, June.
  • Handle: RePEc:jns:jbstat:v:232:y:2012:i:3:p:318-335

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    References listed on IDEAS

    1. Stefan Szymanski, 2007. "The Champions League And The Coase Theorem," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 355-373, July.
    2. Ruud Koning, 2009. "Sport and Measurement of Competition," De Economist, Springer, vol. 157(2), pages 229-249, June.
    3. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242-242.
    4. Stefan Kesenne, 2007. "The Peculiar International Economics Of Professional Football In Europe," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 388-399, July.
    5. Henrik Jacobsen Kleven & Camille Landais & Emmanuel Saez, 2013. "Taxation and International Migration of Superstars: Evidence from the European Football Market," American Economic Review, American Economic Association, vol. 103(5), pages 1892-1924, August.
    6. Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
    7. Eberhard Feess & Frank Stähler, 2009. "Revenue Sharing In Professional Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(2), pages 255-265, May.
    8. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-1319, Nov.-Dec..
    9. Bernd Frick, 2007. "The Football Players' Labor Market: Empirical Evidence From The Major European Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 422-446, July.
    10. Babatunde Buraimo & David Forrest & Robert Simmons, 2007. "Freedom of Entry, Market Size, and Competitive Outcome: Evidence from English Soccer," Southern Economic Journal, Southern Economic Association, vol. 74(1), pages 204-213, July.
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    Cited by:

    1. Ruud Koning, 2009. "Sport and Measurement of Competition," De Economist, Springer, vol. 157(2), pages 229-249, June.
    2. Jeroen Schokkaert & Johan Swinnen, 2013. "It is Harder, not Easier, to Predict the Winner of the Champions League," LICOS Discussion Papers 32913, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    3. Ruud Koning, 2014. "Professional soccer in the Netherlands," Chapters,in: Handbook on the Economics of Professional Football, chapter 20, pages 336-350 Edward Elgar Publishing.

    More about this item


    Bosman ruling; Champions League; soccer;


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