Talent Recruitment and Firm Performance: The Business of Major League Sports
Firms rely heavily on their investments in human capital to achieve profits. This research takes advantage of detailed information on worker performance and confidential information on firm revenue and operating costs to investigate the relationship between talent migration and firm profitability in major league sports. One key problem that firms have is identifying performance measures for its workforce, especially for potential employees (recruits). In contrast to nearly all other industries, in the industry of professional team sports, detailed information about the past performance of each individual worker (athlete) is known to all potential employers. First, I demonstrate using public data that worker (athlete) statistics aggregated to the establishment (team) level correlate with success on the field (measured in win percentage). Second, I use confidential data from the 2007 Economic Censuses, and from the 2007 and 2008 Service Annual Surveys to investigate the link between individual worker performance and team profitability, controlling for many other aspects of the sports business, specifically taking account of the mobility of athletic “stars” and “superstars” from one team to another. The investigations in this paper provide support for the hypothesis that hiring talented individuals (stars) will increase a firm’s profit. However, there is not convincing support for the incremental benefit of hiring superstars. The mixed evidence suggests a benefit on balance.
|Date of creation:||Nov 2013|
|Date of revision:||Feb 2014|
|Contact details of provider:|| Postal: 4600 Silver Hill Road, Washington, DC 20233|
Phone: (301) 763-6460
Fax: (301) 763-5935
Web page: http://www.census.gov/ces
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas N. Hubbard, 2009. "Specialization, Firms, and Markets: The Division of Labor within and between Law Firms," Journal of Law, Economics and Organization, Oxford University Press, vol. 25(2), pages 339-371, October.
- Timothy Dunne & Mark Roberts & Shawn Klimek & Yi Xu, 2007.
"The Dynamics of Market Structure and Market Size in Two Health Services Industries,"
07-26, Center for Economic Studies, U.S. Census Bureau.
- Timothy Dunne & Shawn D. Klimek & Mark J. Roberts & Daniel Yi Xu, 2009. "The Dynamics of Market Structure and Market Size in Two Health Service Industries," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 303-327 National Bureau of Economic Research, Inc.
- Timothy Dunne & Shawn D. Klimek & Mark J. Roberts & Yi Xu, 2007. "The dynamics of market structure and market size in two health services industries," Working Paper 0712, Federal Reserve Bank of Cleveland.
- Egon Franck & Stephan Nüesch, 2007.
"Talent and/or Popularity - What Does it Take to Be a Superstar,"
0018, University of Zurich, Center for Research in Sports Administration (CRSA).
- Egon Franck & Stephan Nüesch, 2012. "Talent And/Or Popularity: What Does It Take To Be A Superstar?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 202-216, 01.
- Egon Franck & Stephan Nüesch, 2007. "Talent and/or Popularity - What Does it Take to Be a Superstar," Working Papers 0074, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Glenn, Andrew & McGarrity, Joseph P & Weller, Jim, 2001. "Firm-Specific Human Capital, Job Matching, and Turnover: Evidence from Major League Baseball, 1900-1992," Economic Inquiry, Western Economic Association International, vol. 39(1), pages 86-93, January.
- Casey Ichniowski & Anne E. Preston, 2012. "Does March Madness Lead to Irrational Exuberance in the NBA Draft? High-Value Employee Selection Decisions and Decision-Making Bias," NBER Working Papers 17928, National Bureau of Economic Research, Inc.
- Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-12, March.
- Lynne G. Zucker & Michael R. Darby & Maximo Torero, 2002.
"Labor Mobility from Academe to Commerce,"
Journal of Labor Economics,
University of Chicago Press, vol. 20(3), pages 629-660, July.
- Arzaghi Mohammad & Berndt Ernst R. & Davis James C. & Silk Alvin J., 2012. "The Unbundling of Advertising Agency Services: An Economic Analysis," Review of Marketing Science, De Gruyter, vol. 10(1), pages 1-55, December.
- Daniel, Rascher, 2008. "Franchise Relocations, Expansions, and Mergers in Professional Sports Leagues," MPRA Paper 25809, University Library of Munich, Germany.
- Frank Limehouse & Robert McCormick, 2011. "Impacts of Central Business District Location: A Hedonic Analysis of Legal Service Establishments," Working Papers 11-21, Center for Economic Studies, U.S. Census Bureau.
- Hausman, Jerry A & Leonard, Gregory K, 1997. "Superstars in the National Basketball Association: Economic Value and Policy," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 586-624, October.
- Camilla Lenzi, 2009. "Patterns and determinants of skilled workers' mobility: evidence from a survey of Italian inventors," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(2), pages 161-179.
- Edward P. Lazear & Kathryn L. Shaw, 2007.
"Personnel Economics: The Economist's View of Human Resources,"
NBER Working Papers
13653, National Bureau of Economic Research, Inc.
- Edward P. Lazear & Kathryn L. Shaw, 2007. "Personnel Economics: The Economist's View of Human Resources," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 91-114, Fall.
- Boris Groysberg & Linda-Eling Lee & Ashish Nanda, 2008. "Can They Take It With Them? The Portability of Star Knowledge Workers' Performance," Management Science, INFORMS, vol. 54(7), pages 1213-1230, July.
When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:13-54r. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fariha Kamal)
If references are entirely missing, you can add them using this form.