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Aggregate Wages Of Players and Performance in Italian Serie A

Listed author(s):
  • Caruso, Raul
  • Di Domizio, Marco
  • Rossignoli, Domenico

This paper investigated the relationship between players’ wages and sport performance in the Italian top professional football league - Serie A. The analysis focused on 14 seasons from 2001/2002 to 2014/2015. Findings show that aggregate wage expenditure is a robust predictor of success for Italian professional football teams. We first exploited a fixed-effects panel data and eventually we have addressed the problem of endogeneity by providing a dynamic IV specification of the model. Based on the System-GMM framework, we employed a model including lagged terms of dependent variables and covariates as instruments to control for endogeneity as well as alternative exogenous instruments to control for geographical/environmental factors and for socio-economic factors that could be the actual predictors of performance through an indirect effect on payroll.

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File URL: https://mpra.ub.uni-muenchen.de/72720/1/MPRA_paper_72720.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 72720.

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Date of creation: Jul 2016
Handle: RePEc:pra:mprapa:72720
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  1. Babatunde Buraimo & Giuseppe Migali & Robert Simmons, 2014. "An analysis of consumer response to corruption," Working Papers 64473209, Lancaster University Management School, Economics Department.
  2. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
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  5. Stefan Szymanski, 2013. "Wages, transfers and the variation of team performance in the English Premier League," Chapters,in: The Econometrics of Sport, chapter 3, pages 53-62 Edward Elgar Publishing.
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  10. Alessandro Bucciol & Marco Piovesan, 2012. "Pay Dispersion and Work Performance," Harvard Business School Working Papers 12-075, Harvard Business School.
  11. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
  12. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-1319, Nov.-Dec..
  13. Paolo Di Betta & Carlo Amenta, 2010. "A die-hard aristocracy: competitive balance in Italian soccer, 1929-2009," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(2), pages 13-40, Settembre.
  14. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
  15. Bernd Frick, 2007. "The Football Players' Labor Market: Empirical Evidence From The Major European Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 422-446, July.
  16. Stefan Szymanski & Ron Smith, 1997. "The English Football Industry: profit, performance and industrial structure," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(1), pages 135-153.
  17. Yamamura, Eiji, 2010. "Wage disparity and team performance in the process of industry development: Evidence from Japan’s professional football league," MPRA Paper 27363, University Library of Munich, Germany.
  18. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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