Foreign players, team production, and technical efficiency: Evidence from European soccer

Abstract

As on‐field success is nowadays the main objective of European soccer clubs, good management needs to extract the highest sport success from the squad talent at hand. Because teams differ in their quality, performance needs to be compared with the best practice of comparable units. One remarkable source of heterogeneity across teams is the squad composition, which can produce gains from diversity together with communication costs. The paper studies the efficiency in sporting performance of soccer teams, paying attention to how the number of foreign players relates to productive inefficiency. Using data for 146 teams in the top 5 European leagues during 10 seasons, we estimate a double heteroskedastic True Random Effects Stochastic Frontier team production function. We find that (i) the number of passes, ball recoveries, and shots from the penalty area improve team efficiency, and (ii) a higher number of foreign players increase inefficiency. Our findings suggest that gains from squad diversity might be offset by communication costs.

Football players in light of economic value theory: Critical review and conceptualisation

“…Many studies on the drivers of the value of football players deem these values as proxies for transfer fees in their empirical settings (see subsequent Section 3.2). Furthermore, whether they are considered as proxies for transfer fees or for diverse variables such as superstardom, quality, salaries, or talent, Transfermarkt values are commonly used in a wide variety of empirical settings to investigate football economic questions such as productive efficiency (Boto-García et al, 2023), attendance (Baydina et al, 2021;Goller & Krumer, 2020;Schreyer et al, 2016;Serrano et al, 2015), referee bias (Faltings et al, 2023), valuation of clubs (Scelles et al, 2016), team performance (Massaro et al, 2019;Scelles & Khanmoradi, 2023), playing time (Naidenova et al, 2020), sport leagues organisational performance (Terrien & Andreff, 2020), TV audience (Schreyer et al, 2018), brand strength (Coates et al, 2017), results forecast (Peeters, 2018;Reade & Garcia-del-Barrio, 2023) or wages (Szymanski, 2022). In the meantime, several newspapers report the use of Transfermarkt values in the bargaining between football clubs for actual transfer fees 12 or in financial documentation.…”