Does Employing Skilled Immigrants Enhance Competitive Performance? Evidence from European Football Clubs

56 Pages Posted: 8 Nov 2021 Last revised: 17 Jun 2022

See all articles by Britta Glennon

Britta Glennon

Wharton School, University of Pennsylvania

Francisco Morales

Universidad Diego Portales

Seth Carnahan

Washington University in St. Louis

Exequiel Hernandez

University of Pennsylvania - The Wharton School

Date Written: November 2021

Abstract

We investigate the effect of hiring skilled immigrant employees on the performance of organizations. This relationship has been difficult to establish in prior work due to theoretical ambiguity, limited data, and inherent endogeneity. We overcome these difficulties by studying European football (soccer) clubs during 1990-2020. Detailed microdata from this setting offers unusual transparency on the migration and hiring of talent and their contribution to collective performance. Further, the industry is characterized by country-level rule changes that govern the number of immigrant players clubs can hire. Using these rule changes as the basis for instrumental variables, we find a positive local average treatment effect of the number of immigrant players on the club’s in-game performance. To examine the theoretical mechanisms, we explore whether immigrants cause superior performance because they are more talented than natives or because they enhance the national diversity of their clubs. We find strong evidence for the talent mechanism. We find contingent evidence for the national diversity mechanism: national diversity has a positive relationship with club performance only when the club employs an immigrant manager (coach). The presence of an immigrant manager also strengthens the positive relationship between the number of immigrant players and club performance.

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Suggested Citation

Glennon, Britta and Morales, Francisco and Carnahan, Seth and Hernandez, Exequiel, Does Employing Skilled Immigrants Enhance Competitive Performance? Evidence from European Football Clubs (November 2021). NBER Working Paper No. w29446, Available at SSRN: https://ssrn.com/abstract=3958633

Britta Glennon (Contact Author)

Wharton School, University of Pennsylvania

3620 Locust Walk
SH-DH
Philadelphia, PA 19104
United States

HOME PAGE: http://brittaglennon.com

Francisco Morales

Universidad Diego Portales ( email )

Vergara 210
Santiago
Chile

Seth Carnahan

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Exequiel Hernandez

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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