| dc.description.abstract | Thanks to the popularity of sports and advanced technology of mass communication, the professional sports industry has been a part of modern life. Besides the attractive games, the business of team is also an attraction for the fans. As a result of the movie “Moneyball”, the influence on team performance evaluated by salary structure and roster development has been a top issue both in the sport industrys and labor economics.
This research uses the data of players in MLB for the recent 20 years (1996-2015) as a sample, exploring the impacts of the salary structure and roster development on team performance. Win probability and home game attendance are two indexes used to evaluate the team performance; total salary, salary inequality, the share of top-10-salaried players, players turnover rates as the factors which may influence the team performance.
The empirical results show that salary inequality has negative impacts on both the win probability and home game attendance. In addition, the share of top-10-salaried players has a positive effect and player turnover rate has a negative effect, respectively, on the win probability, but both have no apparent impact on the home game attendance. In order to overcome the potential endogeneity of total salary, we estimate the model via instrumental variable (IV) estimation method. The IV estimation results show total salary have a larger effect on the team performance, this implies that the effect of total salary is underestimated when ignore the endogeneity problem. | en_US |