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

Qi Ge, Brad Humphreys and Alexander Eisert
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Alexander Eisert: Vassar College

No 22-07, Working Papers from Department of Economics, West Virginia University

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.

Keywords: vertical integration; human capital development; competitive balance; minor league baseball (search for similar items in EconPapers)
JEL-codes: L22 Z21 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2022-08
New Economics Papers: this item is included in nep-spo
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