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Vertical Integration and Competitive Balance in Professional Sports: Evidence from Minor League Baseball

Author

Listed:
  • Qi Ge

    (Vassar College)

  • Brad R. Humphreys

    (West Virginia University, Department of Economics)

  • Alexander Eisert

    (Vassar College)

Abstract

Major League Baseball (MLB) teams regularly call up players from their Minor League Baseball (MiLB) affliates to fulfill roster needs. This paper utilizes a manually collected panel of player call-ups between 1946 and 2019 and studies their impact on competitive balance in the minor leagues. Our results indicate an overall positive relationship between call-ups and competitive balance in the MiLB, with the pro-competitive effect primarily driven by the AA leagues and not AAA leagues. We also  find suggestive evidence of the effect being likely explained by the promotion of MiLB players to MLB, rather than the demotion of MLB players to MiLB. Our findings provide important policy implications regarding vertical relationships and human capital development in professional sports.

Suggested Citation

  • Qi Ge & Brad R. Humphreys & Alexander Eisert, 2022. "Vertical Integration and Competitive Balance in Professional Sports: Evidence from Minor League Baseball," Working Papers 22-07, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:22-07
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    File URL: https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=1063&context=econ_working-papers
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies

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