IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i1p70-79.html

The key importance of spending on research and development in Formula One

Author

Listed:
  • Ivan Loník
  • Vojtěch Kotrba

Abstract

This paper analyzes the impact of budget strategy on Formula One team success in the World Constructors Championship using data from 11 seasons (2010–2020) before the budget cap. It demonstrates that budget strategy positively affects standings, points, podium finishes, and race completion. The motivation to achieve better results is explained through success‐related returns. Cost–benefit analysis and regression models were employed, revealing a significant influence of budget strategy on team success. Investing in research and development emerges as the most effective approach to enhance the success rate.

Suggested Citation

  • Ivan Loník & Vojtěch Kotrba, 2024. "The key importance of spending on research and development in Formula One," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(1), pages 70-79, January.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:1:p:70-79
    DOI: 10.1002/mde.3983
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.3983
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.3983?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:jomstd:v:47:y:2010:i:s1:p:884-910 is not listed on IDEAS
    2. Mao, Luke Lunhua & Huang, Haiyan, 2016. "Social impact of Formula One Chinese Grand Prix: A comparison of local residents’ perceptions based on the intrinsic dimension," Sport Management Review, Elsevier, vol. 19(3), pages 306-318.
    3. Lennart E. Henriksson, 2001. "Gambling in Canada: some insights for cost-benefit analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(1-3), pages 113-123.
    4. David J. Smith, 2012. "Technological discontinuities, outsiders and social capital: a case study from Formula 1," European Journal of Innovation Management, Emerald Group Publishing Limited, vol. 15(3), pages 332-350, July.
    5. Mark Jenkins, 2010. "Technological Discontinuities and Competitive Advantage: A Historical Perspective on Formula 1 Motor Racing 1950–2006," Journal of Management Studies, Wiley Blackwell, vol. 47(5), pages 884-910, July.
    6. Fairley, Sheranne & Tyler, B. David & Kellett, Pamm & D'Elia, Kari, 2011. "The Formula One Australian Grand Prix: Exploring the triple bottom line," Sport Management Review, Elsevier, vol. 14(2), pages 141-152, May.
    7. Luke Lunhua Mao & Haiyan Huang, 2016. "Social impact of Formula One Chinese Grand Prix: A comparison of local residents’ perceptions based on the intrinsic dimension," Sport Management Review, Taylor & Francis Journals, vol. 19(3), pages 306-318, July.
    8. Chris Judde & Ross Booth & Robert Brooks, 2013. "Second Place Is First of the Losers," Journal of Sports Economics, , vol. 14(4), pages 411-439, August.
    9. Earl L. Grinols & David B. Mustard, 2001. "Business profitability versus social profitability: evaluating industries with externalities, the case of casinos," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(1-3), pages 143-162.
    10. Koronios, Konstantinos & Vrontis, Demetris & Thrassou, Alkis, 2021. "Strategic sport sponsorship management – A scale development and validation," Journal of Business Research, Elsevier, vol. 130(C), pages 295-307.
    11. Sheranne Fairley & B. David Tyler & Pamm Kellett & Kari D’Elia, 2011. "The Formula One Australian Grand Prix: Exploring the triple bottom line," Sport Management Review, Taylor & Francis Journals, vol. 14(2), pages 141-152, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. José E. Ramos-Ruiz & Inmaculada Jiménez-Manchado & Marianys Fernández & Manuel Rivera-Mateos, 2025. "Clustering Residents’ Perception and Support of Urban Rally Tourism: The Sierra Morena Rally in Córdoba, Spain," Societies, MDPI, vol. 15(4), pages 1-19, March.
    2. Aslı Öztopcu, 2024. "Environmental sustainability in sport: formula 1’s SDGs responsiveness," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(12), pages 31075-31097, December.
    3. Ester Gutiérrez & Sebastián Lozano, 2020. "Benchmarking Formula One auto racing circuits: a two stage DEA approach," Operational Research, Springer, vol. 20(4), pages 2059-2083, December.
    4. Gulijiazi Yeerkenbieke & Chunci Chen & Guizhen He, 2021. "Public Perceived Effects of 2022 Winter Olympics on Host City Sustainability," Sustainability, MDPI, vol. 13(7), pages 1-20, March.
    5. Muwei Xi & Dingqing Wang & Ye Xiang, 2023. "Fiscal Expenditure on Sports and Regional Carbon Emissions: Evidence from China," Sustainability, MDPI, vol. 15(9), pages 1-15, May.
    6. Nicholas Wise, 2020. "Urban and Rural Event Tourism and Sustainability: Exploring Economic, Social and Environmental Impacts," Sustainability, MDPI, vol. 12(14), pages 1-5, July.
    7. Kai-Michael Griese & Kim Werner & Johannes Hogg, 2017. "Avoiding Greenwashing in Event Marketing: An Exploration of Concepts, Literature and Methods," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 7(4), pages 1-15, December.
    8. Kobe Helsen & Marijke Taks & Jeroen Scheerder, 2022. "Involvement, Social Impact Experiences, and Event Support of Host Residents Before, during, and after the 2021 UCI Road World Championships," Sustainability, MDPI, vol. 14(15), pages 1-22, August.
    9. Juan Antonio Sánchez-Sáez & Francisco Segado Segado & Ferran Calabuig-Moreno & Ana Mª Gallardo Guerrero, 2020. "Measuring Residents’ Perceptions of Corporate Social Responsibility at Small- and Medium-Sized Sports Events," IJERPH, MDPI, vol. 17(23), pages 1-17, November.
    10. Balázs Polcsik & Tamás Laczkó & Szilvia Perényi, 2022. "Euro 2020 Held during the COVID-19 Period: Budapest Residents’ Perceptions," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    11. Runyuan Jia & Juan Antonio Sánchez-Sáez & Francisco Segado Segado, 2023. "The Impact of the China Open 500 Event on Sense of Community: Comparisons of Volunteers’ Pre- and Post-Event Perceptions," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    12. Onur Burak Celik, 2020. "Survival of Formula One Drivers," Social Science Quarterly, Southwestern Social Science Association, vol. 101(4), pages 1271-1281, July.
    13. Moellman, Nicholas & Mitra, Aparna, 2013. "Indian gaming in Oklahoma: Implications for community welfare," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 64-70.
    14. Sergi Cerezo-Esteve & Eduard Inglés & Jordi Segui-Urbaneja & Francesc Solanellas, 2022. "The Environmental Impact of Major Sport Events (Giga, Mega and Major): A Systematic Review from 2000 to 2021," Sustainability, MDPI, vol. 14(20), pages 1-15, October.
    15. Rasmus K. Storm & Tor Georg Jakobsen & Christian Gjersing Nielsen, 2020. "The impact of Formula 1 on regional economies in Europe," Regional Studies, Taylor & Francis Journals, vol. 54(6), pages 827-837, June.
    16. Oliver Budzinski & Arne Feddersen, 2020. "Measuring competitive balance in Formula One racing," Chapters, in: Plácido Rodríguez & Stefan Kesenne & Brad R. Humphreys (ed.), Outcome Uncertainty in Sporting Events, chapter 1, pages 5-26, Edward Elgar Publishing.
    17. Rei Yamashita, 2021. "Mega-Para-Sporting Event Social Impacts Perceived by Tokyo Residents: Comparison of Residents’ Vitality," Sustainability, MDPI, vol. 13(16), pages 1-14, August.
    18. Hans Erik Næss, 2019. "Investment Ethics and the Global Economy of Sports: The Norwegian Oil Fund, Formula 1 and the 2014 Russian Grand Prix," Journal of Business Ethics, Springer, vol. 158(2), pages 535-546, August.
    19. Mallen, Cheryl & Chard, Chris, 2012. "“What could be” in Canadian sport facility environmental sustainability," Sport Management Review, Elsevier, vol. 15(2), pages 230-243.
    20. Michael Wenz, 2008. "Matching estimation, casino gambling and the quality of life," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(1), pages 235-249, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:45:y:2024:i:1:p:70-79. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.