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The effect of clubs’ bargaining power on football player’s transfer value

Author

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  • Orlov, Denis

    () (Higher School of Economics, Perm, Russian Federation)

Abstract

The paper employs data for the 2013–15 seasons to estimate the factors influencing the difference between the football players’ transfer and market value. Player transfer proneness to fully paid and zero transfer is modeled and three-stage Heckman procedure is applied to take account of sample selection bias. The main finding of the paper is the fact that the higher number of negotiating clubs leads to a higher gap in the dependent variable. The new proxy variable which reflects popularity of the player among the fans is introduced. It is also found out that buyers are using the risk-averse strategy when buying new players by trying to invest in more stable ones in the long-term.

Suggested Citation

  • Orlov, Denis, 2015. "The effect of clubs’ bargaining power on football player’s transfer value," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 45-64.
    • Handle: RePEc:ris:apltrx:0271
    as

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    References listed on IDEAS

    as
    1. Speight, Alan & Thomas, Dennis, 1997. "Arbitrator Decision-Making in the Transfer Market: An Empirical Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(2), pages 198-215, May.
    2. Carmichael, Fiona & Forrest, David & Simmons, Robert, 1999. "The Labour Market in Association Football: Who Gets Transferred and For How Much?," Bulletin of Economic Research, Wiley Blackwell, vol. 51(2), pages 125-150, April.
    3. Rosen, Sherwin & Sanderson, Allen, 2001. "Labour Markets in Professional Sports," Economic Journal, Royal Economic Society, vol. 111(469), pages 47-68, February.
    4. John Ermisch & Robert Wright, 1994. "Interpretation of negative sample selection effects in wage offer equations," Applied Economics Letters, Taylor & Francis Journals, vol. 1(11), pages 187-189.
    5. Polyakov, Konstantin & Zhukova, Ludmila, 2013. "Human capital estimation in professional football," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 29(1), pages 29-44.
    6. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242-242.
    7. Pedro Garcia-del-Barrio & Stefan Szymanski, 2006. "Goal! Profit maximization and win maximization in football leagues," Working Papers 0621, International Association of Sports Economists;North American Association of Sports Economists.
    8. Jeroen Ruijg & Hans van Ophem, 2015. "Determinants of football transfers," Applied Economics Letters, Taylor & Francis Journals, vol. 22(1), pages 12-19, January.
    9. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
    10. 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.
    11. Reilly, Barry & Witt, Robert, 2011. "Disciplinary sanctions in English Premiership Football: Is there a racial dimension?," Labour Economics, Elsevier, vol. 18(3), pages 360-370, June.
    12. Stefan Szymanski & Ron Smith, 1997. "The English Football Industry: profit, performance and industrial structure," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(1), pages 135-153.
    13. Simon Medcalfe, 2008. "English league transfer prices: is there a racial dimension? A re-examination with new data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(11), pages 865-867.
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    More about this item

    Keywords

    free transfer; Heckman procedure; sample selection bias;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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