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The Economic Consequences Of Foreigner Rules In National Sports Leagues

  • Markus LANG

    ()

    (Institute of Strategy and Business Economics, University of Zurich)

  • Alexander RATHKE

    ()

    (Institute for Empirical Research in Economics, University of Zurich)

  • Marco RUNKEL

    ()

    (Faculty of Economics and Management, University of Magdeburg)

Profitable and balanced domestic league sports are among the central prerequisites for attracting the right to host a mega-event like the soccer world cup as well as for the overall economic success of such events. This paper provides a contest model of a professional team sports league and analyzes the impact of a restriction on foreign players. It shows that a league with binding restrictions on foreign talent for all clubs is more balanced than a league without binding restrictions on foreign talent. Moreover, the wage level of domestic (foreign) talent is higher (lower) in a league with a binding restriction on foreign players. Finally, a tighter restriction on foreign players increases profits of all clubs.

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Article provided by Region et Developpement, LEAD, Universite du Sud - Toulon Var in its journal Région et Développement.

Volume (Year): 31 (2010)
Issue (Month): ()
Pages: 47-64

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Handle: RePEc:tou:journl:v:31:y:2010:p:47-64
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