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Is There Salary Discrimination by Nationality in the NBA?

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  • Chih-Hai Yang
  • Hsuan-Yu Lin

Abstract

The authority of the National Basketball Association (NBA) over the past decade has actively internationalized the game by recruiting potential international players and expanding overseas markets. This article examines the determinants of salaries for NBA players, aiming to identify the existence of nationality discrimination on players’ salary and whether the market size of international players’ home countries matters to their compensation. Based on an unbalanced panel data of 618 NBA players between the 1999-2000 and 2007-2008 seasons and employing the technique of two-stage double fixed-effect model, the empirical results suggest that international players seem to receive a lower salary than that of their U.S.-born counterparts, ceteris paribus, suggesting the existence of salary discrimination by nationality. However, international players who come from a large economy receive preferential labor market treatment, highlighting the importance of the home country market to their salaries. The player characteristics such as positions, height, draft, and a team’s local market size indeed play crucial roles in determining players’ salaries. The authors also find that U.S.-born White players tend to be paid less than U.S.-born Black players. It may reflect the fact that more WHITEs tend to be Bench players or the possibility of racial discrimination.

Suggested Citation

  • Chih-Hai Yang & Hsuan-Yu Lin, 2012. "Is There Salary Discrimination by Nationality in the NBA?," Journal of Sports Economics, , vol. 13(1), pages 53-75, February.
  • Handle: RePEc:sae:jospec:v:13:y:2012:i:1:p:53-75
    DOI: 10.1177/1527002510391617
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    3. Hisahiro Naito & Yu Takagi, 2017. "Is there A Positive Association between Increasing Salary Discrimination in the NBA and Unshrinking Racial Income Gap of White and Black Citizens ?," Tsukuba Economics Working Papers 2017-001, Faculty of Humanities and Social Sciences, University of Tsukuba.
    4. Harald Oberhofer & Marian Schwinner, 2017. "Do Individual Salaries Depend On the Performance of the Peers? Prototype Heuristic and Wage Bargaining in the NBA," WIFO Working Papers 534, WIFO.
    5. David J. Berri & Richard C. K. Burdekin & Christian Deutscher, 2022. "Nationality Effects on the Allocation of Playing Time in the Chinese Basketball Association: Xenophilia or Xenophobia?," Journal of Sports Economics, , vol. 23(2), pages 156-174, February.
    6. Mario Lackner, 2016. "Teams as Superstars: Effort and Risk Taking in Rank-Order Tournaments for Women and Men," Economics working papers 2016-13, Department of Economics, Johannes Kepler University Linz, Austria.
    7. Hisahiro Naito & Yu Takagi, 2017. "Is racial salary discrimination disappearing in the NBA? evidence from data during 1985–2015," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 651-669, September.
    8. Hisahiro Naito & Yu Takagi, 2016. "Does Increasing Salary Discrimination in the NBA Reflect Disparity of Fans' Purchasing Power?," Tsukuba Economics Working Papers 2016-002, Faculty of Humanities and Social Sciences, University of Tsukuba.
    9. Ze'ev Shtudiner, 2015. "The Marriage Premium and Productivity: The Case of NBA Players," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 4(4), pages 53-65, December.
    10. Johnny Ducking & Peter A. Groothuis & James Richard Hill, 2017. "Compensation Discrimination: an Analysis of Linebackers, Defensive Linemen, and Defensive Backs in the National Football League," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 251-260, December.
    11. David J. Berri & Christian Deutscher & Arturo Galletti, 2015. "Born in the USA: National Origin Effects on Time Allocation in US and Spanish Professional Basketball," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232(1), pages 41-50, May.
    12. Aju J. Fenn & Lucas Gerdes & Samuel Rothstein, 2019. "Country of Origin Effects on the Average Annual Values of NHL Player Contracts," IJFS, MDPI, vol. 7(2), pages 1-11, May.
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    14. Olugbenga Ajilore, 2014. "Do white NBA players suffer from reverse discrimination?," Economics Bulletin, AccessEcon, vol. 34(1), pages 558-566.
    15. James Richard Hill & Peter A. Groothuis, 2016. "Is There a Wage Premium or Wage Discrimination For Foreign-Born Players in the NBA?," Working Papers 16-11, Department of Economics, Appalachian State University.
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