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The Impact of Managerial Quality on Organizational Performance: Evidence from German Soccer

Author

Listed:
  • Bernd Frick

    (Witten/Herdecke University)

  • Robert Simmons

    (Lancaster University)

Abstract

Although a considerable literature exists on determinants of managerial compensation, much of it focussing on the role of incentives, there is much less known about the im-pact of managerial remuneration and quality upon attainment of organizational goals. In this paper we use a novel panel data set from the German premier soccer league (Bundesliga) as a case to show how variations in managerial compensation impact posi-tively upon organizational (team) success. This positive impact is revealed using sto-chastic frontier production function estimation. Given a particular amount of spending on players relative to the rest of the Bundesliga, a team that hires a better quality coach can expect to achieve a higher points score by reducing technical inefficiency. However, our results also suggest that the market for head coaches may be allocatively inefficient in that coaches are paid below their marginal revenue products.

Suggested Citation

  • Bernd Frick & Robert Simmons, 2007. "The Impact of Managerial Quality on Organizational Performance: Evidence from German Soccer," Working Papers 0708, International Association of Sports Economists;North American Association of Sports Economists.
    • Handle: RePEc:spe:wpaper:0708
    as

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    File URL: http://web.holycross.edu/RePEc/spe/FrickSimmons_Managers.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    head coaches; soccer; efficiency; stochastic frontier analysis;
    All these keywords.

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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