Salary Cap, Organizational Gap, and Catch-up in the Performance of NBA Teams: A Two-Stage DEA Model Under Heterogeneity

Nikos Chatzistamoulou, Kostantinos Kounetas (kounetas@upatras.gr) and Antonakis Theodor

Journal of Sports Economics, 2022, vol. 23, issue 2, 123-155

Abstract: This paper evaluates National Basketball Association teams performance using a two-stage approach under a metafrontier framework. Our approach decomposes overall efficiency into salary-cap and on-court efficiency. Organizational gaps between different organizational structures are calculated as well. The introduction of the salary cap as an important element for a competitive market preventing monopoly formation allows the examination of the effects on different types of performance. Findings reveal that teams experience increased performance while organizational gaps decline. Moreover, a b e t a and s i g m a convergence analysis reveals convergence patterns. Finally, the catch-up index denotes that the speed of convergence increases, especially after the salary cap policy implementation.

Keywords: salary cap; National Basketball Association; two-stage DEA; metafrontier and heterogeneity; organizational gap (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:23:y:2022:i:2:p:123-155

DOI: 10.1177/15270025211022253

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