IDEAS home Printed from https://ideas.repec.org/p/liv/livedp/202506.html

How League Structure Shapes Behaviour: Evidence from Regulatory Changes in Mexico and South Korea

Author

Listed:
  • Juan De Dios Tena

Abstract

This paper estimates the causal impact of entry regulation on organisational behaviour and market outcomes by exploiting two natural experiments in professional football. It examines the consequences of transitioning between a promotion-and-relegation system and a closed league in Mexico’s Liga MX and South Korea’s K-League 1. Using a difference-in-differences strategy, the analysis compares the evolution of match-level outcomes in the treated leagues with those in suitable control groups—Brazil’s Brasileirão and Japan’s J-League. Closing the league in Liga MX reduced competitive balance—matches became, on average, less close—lowered stadium attendance by around 40%, and decreased global search interest by about 8 Google Trends points, while also making managerial replacements less effective. Introducing promotion and relegation in the K-League 1 increased competitive intensity and enhanced the efficacy of managerial changes. Together, these findings provide the first causal evidence on how league design shapes incentives and behaviour in professional sports, with broader implications for industries where performancebased entry rules influence organisational strategy.

Suggested Citation

  • Juan De Dios Tena, 2025. "How League Structure Shapes Behaviour: Evidence from Regulatory Changes in Mexico and South Korea," Working Papers 202506, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:202506
    as

    Download full text from publisher

    File URL: https://www.liverpool.ac.uk/media/livacuk/schoolofmanagement/departmentofeconomics/workingpapers/ECON-WP202506.pdf
    File Function: First version, 2025
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    2. Shenkman, Evgenia & Coates, Dennis & Chadov, Aleksei & Parshakov, Petr, 2022. "Team vs. individual tournament: An organizer's dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 476-492.
    3. Giulio Cornelli & Sebastian Doerr & Leonardo Gambacorta & Ouarda Merrouche, 2024. "Regulatory Sandboxes and Fintech Funding: Evidence from the UK," Review of Finance, European Finance Association, vol. 28(1), pages 203-233.
    4. Chen, Feng & Harris, Douglas N., 2023. "The market-level effects of charter schools on student outcomes: A national analysis of school districts," Journal of Public Economics, Elsevier, vol. 228(C).
    5. Garrett, Thomas A., 2003. "Aggregated versus disaggregated data in regression analysis: implications for inference," Economics Letters, Elsevier, vol. 81(1), pages 61-65, October.
    6. Nicholas Economides & Katja Seim & V. Brian Viard, 2008. "Quantifying the benefits of entry into local phone service," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 699-730, September.
    7. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    8. Roger G. Noll, 2002. "The Economics of Promotion and Relegation in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 169-203, May.
    9. Goetz, Andrew R. & Vowles, Timothy M., 2009. "The good, the bad, and the ugly: 30 years of US airline deregulation," Journal of Transport Geography, Elsevier, vol. 17(4), pages 251-263.
    10. Jan C. van Ours & Martin A. van Tuijl, 2016. "In-Season Head-Coach Dismissals And The Performance Of Professional Football Teams," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 591-604, January.
    11. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    12. de Dios Tena, Juan & Forrest, David, 2007. "Within-season dismissal of football coaches: Statistical analysis of causes and consequences," European Journal of Operational Research, Elsevier, vol. 181(1), pages 362-373, August.
    13. Stefan Szymanski, 2010. "The Comparative Economics of Sport," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-27427-3, April.
    14. Briglauer, Wolfgang & Cambini, Carlo & Grajek, Michał, 2018. "Speeding up the internet: Regulation and investment in the European fiber optic infrastructure," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 613-652.
    15. Guillaume Burghouwt & Pablo Mendes De Leon & Jaap De Wit, 2015. "EU Air Transport Liberalisation Process, Impacts and Future Considerations," International Transport Forum Discussion Papers 2015/4, OECD Publishing.
    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. Kaori Narita & J.D. Tena & Claudio Detotto, 2022. "Causal Inference with Observational Data: A Tutorial on Propensity Score Analysis," Working Papers 202225, University of Liverpool, Department of Economics.
    2. Sadeghi, Ali & Kibler, Ewald, 2022. "Do bankruptcy laws matter for entrepreneurship? A Synthetic Control Method analysis of a bankruptcy reform in Finland," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    3. Dennis Shen & Peng Ding & Jasjeet Sekhon & Bin Yu, 2022. "Same Root Different Leaves: Time Series and Cross-Sectional Methods in Panel Data," Papers 2207.14481, arXiv.org, revised Oct 2022.
    4. Zhentao Shi & Jin Xi & Haitian Xie, 2025. "A Synthetic Business Cycle Approach to Counterfactual Analysis with Nonstationary Macroeconomic Data," Papers 2505.22388, arXiv.org.
    5. Di, Wenhua & Pattison, Nathaniel, 2023. "Industry Specialization and Small Business Lending," Journal of Banking & Finance, Elsevier, vol. 149(C).
    6. Pekka Malo & Juha Eskelinen & Xun Zhou & Timo Kuosmanen, 2024. "Computing Synthetic Controls Using Bilevel Optimization," Computational Economics, Springer;Society for Computational Economics, vol. 64(2), pages 1113-1136, August.
    7. Robert Messerle & Jonas Schreyögg, 2024. "Country-level effects of diagnosis-related groups: evidence from Germany’s comprehensive reform of hospital payments," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(6), pages 1013-1030, August.
    8. Garoupa, Nuno & Spruk, Rok, 2025. "Populist constitutional backsliding and judicial independence: Evidence from Türkiye," International Review of Law and Economics, Elsevier, vol. 84(C).
    9. Wallimann, Hannes, 2024. "Austria’s KlimaTicket: Assessing the short-term impact of a cheap nationwide travel pass on demand," Transport Policy, Elsevier, vol. 159(C), pages 201-214.
    10. Giulio Breglia & Marco Modica, 2026. "Shifting ground: A counterfactual analysis of recovery in earthquake-affected regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 75(2), pages 1-29, June.
    11. Gonzalez, Felipe & Prem, Mounu, 2020. "Police Repression and Protest Behavior: Evidence from Student Protests in Chile," SocArXiv 3xk5r, Center for Open Science.
    12. Giovanni Mellace & Rok Spruk, 2026. "Long-Term Health and Human Capital Effects of Universal Health Care and Mass Literacy: Evidence from Cuba," Papers 2605.29785, arXiv.org.
    13. Jason Poulos & Andrea Albanese & Andrea Mercatanti & Fan Li, 2021. "Retrospective causal inference via matrix completion, with an evaluation of the effect of European integration on cross-border employment," Papers 2106.00788, arXiv.org.
    14. Qian Chen & Christoffer Koch & Padma Sharma & Gary Richardson, 2020. "Payments Crises and Consequences," NBER Working Papers 27733, National Bureau of Economic Research, Inc.
    15. Stefano, Roberta di & Mellace, Giovanni, 2020. "The inclusive synthetic control method," Discussion Papers on Economics 14/2020, University of Southern Denmark, Department of Economics.
    16. Riste Ichev & Rok Spruk, 2026. "Pricing Catastrophe: How Extreme Political Shocks Reprice Sovereign Risk, Beliefs, and Growth Expectations," Papers 2601.20724, arXiv.org.
    17. Yan Cheng & Jingbo Wang & Xinyu Cao & Zuo-Jun Max Shen & Yuhui Zhang, 2026. "A Deep-DiD Method to Estimate Heterogeneous Treatment Effects: Application to Content Creator Selection," Marketing Science, INFORMS, vol. 45(2), pages 258-279, March.
    18. Sandro Heiniger, 2024. "Data-driven model selection within the matrix completion method for causal panel data models," Papers 2402.01069, arXiv.org.
    19. Christian Alemán-Pericón & Alexander Ludwig & Christopher Busch & Raül Santaeulàlia-Llopis, 2022. "A Stage-Based Identification of Policy Effects," Working Papers 1369, Barcelona School of Economics.
    20. Huang, Chen & Li, Cong & Liu, Feng & Wei, Sijie & Xu, Ruofei, 2025. "COVID-19 and health inequality: Evidence from risky behaviors," Journal of Comparative Economics, Elsevier, vol. 53(3), pages 856-881.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:liv:livedp:202506. 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: Rachel Slater (email available below). General contact details of provider: https://edirc.repec.org/data/mslivuk.html .

    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.