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Salary Cap, Organizational Gap, and Catch-up in the Performance of NBA Teams: A Two-Stage DEA Model Under Heterogeneity

Author

Listed:
  • Nikos Chatzistamoulou
  • Kounetas Kostas
  • Antonakis Theodor

Abstract

This paper evaluates National Basketball Association teams performance using a two-stage approach under a metafrontier framework. Our approach decomposes overall efficiency into salary-cap and on-court efficiency. Organizational gaps between different organizational structures are calculated as well. The introduction of the salary cap as an important element for a competitive market preventing monopoly formation allows the examination of the effects on different types of performance. Findings reveal that teams experience increased performance while organizational gaps decline. Moreover, a b e t a and s i g m a convergence analysis reveals convergence patterns. Finally, the catch-up index denotes that the speed of convergence increases, especially after the salary cap policy implementation.

Suggested Citation

  • Nikos Chatzistamoulou & Kounetas Kostas & Antonakis Theodor, 2022. "Salary Cap, Organizational Gap, and Catch-up in the Performance of NBA Teams: A Two-Stage DEA Model Under Heterogeneity," Journal of Sports Economics, , vol. 23(2), pages 123-155, February.
    • Handle: RePEc:sae:jospec:v:23:y:2022:i:2:p:123-155
    DOI: 10.1177/15270025211022253
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    References listed on IDEAS

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