An Explanation of Economic Impact: Why Positive Impacts Can Exist for Smaller Sports
Sport, Business and Management: An International Journal
37 Pages Posted: 1 Jan 2016 Last revised: 26 Jun 2020
Date Written: December 30, 2015
This explanatory research reviews the economic impact literature to identify the conditions that would theoretically allow any sport, large or small, to generate positive economic effects. Nine conditions are identified that, when present, could allow a community to experience a positive economic impact from a team or stadium. The nine conditions are then used to explain the discrepancy in known empirical outcomes in Major and Minor League Baseball. It appears as if major league teams are more likely to violate the conditions while minor league teams are not. This research finds theoretical support for previous suggestions that smaller teams and events may be beneficial to local economies. In doing so, it also explains previous empirical results that found some minor league baseball classifications are associated with positive gains in per capita income. Stakeholders can use the nine conditions to understand expected economic impact of their relevant sports. This research provides a comprehensive guide to understanding when economic impact can be positive.
Keywords: economic impact, minor league baseball, MLB, stadiums, efficiency
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