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Who made Who? An Empirical Analysis of Competitive Balance in European Soccer Leagues

  • Leif Brandes
  • Egon Franck


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

There is an on-going debate about the optimal degree of team solidarity in professional European soccer leagues. Support for a high degree of team solidarity has been coming from the theory of competitive balance. Within this theory, attendance has always been referred to as the endogenous variable, stating that diminished uncertainty of outcome will result in a lack of attendance demand. This paper takes a new approach towards the relation between competitive balance and attendance demand. First, we show why this relationship might be reversed. Based on seasonal average match attendance and different measures of competitive balance for several soccer leagues in Europe, this paper then presents results using vector autoregressive models and Granger causality tests. Regarding the analyzed relationship, our results clearly show the existence of heterogeneity across different leagues and for tiers within a league.

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Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0041.

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Length: 24 pages
Date of creation: 2005
Date of revision: 2006
Publication status: Published in: Eastern Economic Journal 2007, Vol. 33, No. 3, pp. 379-403.
Handle: RePEc:iso:wpaper:0041
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  1. D Forrest & R Simmons & B Buraimo, 2005. "Freedom of entry, market size and competitive outcome: evidence from English soccer," Working Papers 567322, Lancaster University Management School, Economics Department.
  2. Scully, Gerald W., 1995. "The Market Structure of Sports," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226743950.
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  8. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  9. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
  10. S. M. Dobson & J. A. Goddard, 1998. "Performance and revenue in professional league football: evidence from Granger causality tests," Applied Economics, Taylor & Francis Journals, vol. 30(12), pages 1641-1651.
  11. Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing the Causality between Team Performance and Payroll: The Cases of Major League Baseball and English Soccer," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
  12. Helmut Dietl & Egon Franck & Patrick, 2003. "Überinvestitionsprobleme in einer Sportliga," Working Papers 0020, University of Zurich, Institute for Strategy and Business Economics (ISU).
  13. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
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