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Internal Promotion in Competitive Sports: Evidence from the English Premier League

Mihailo Radoman () and Marcel Voia
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Mihailo Radoman: Canadian Revenue Agency

No 15-09, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: The analysis of English Premier League clubs' reliance on internal versus external sources for new additions to the first-team is motivated by relevant labor economics literature. We consider two dimensions for analysis: (i) the extensive margin that drives the selection of youth players in the first team, and (ii) the intensive margin that looks at their career lifespan once selected. Two uniquely created data sets are utilized to establish robust results in support of the notion that more reputable youth programs provide greater first-team opportunities through internal hiring. Foreign sourced players become more prevalent in the league after the Bosman ruling, and their probability of selection is positively correlated with club stature. Survival analysis results validate prior results in terms of youth training reputation of certain clubs, and establishes a presence of heterogeneity at youth club level that signals differences in player career prospects generated by their youth training. Further, when the unobserved heterogeneity is modelled using discrete finite mixtures we get new insights into the role unobservables in the analysis. In particular, two types of players are identified in the data, one type that represents 33% is the one that drives the exits of the youth players. In addition, this model shows that the Bosman ruling positively impacts the career duration of youth players, as opposed to its negative effect on first-team selection.

Keywords: internal promotion; external hiring; binary resposnse models; Bosman ruling; duration models (search for similar items in EconPapers)
JEL-codes: J21 J24 J61 C14 C41 C52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-spo
Date: 2015-10-16
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Published: Carleton Economic Papers

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Handle: RePEc:car:carecp:15-09