Academic journal article International Journal of Sport Finance

Regional Determinants of Competitiveness: The Case of European Soccer Teams

Academic journal article International Journal of Sport Finance

Regional Determinants of Competitiveness: The Case of European Soccer Teams

Article excerpt

Abstract

This paper investigates the statistical relationship between European regional development and the competitiveness of professional soccer teams. Using data on more than 140 European regions (NUT2) from the period 1990-2006, it concludes that professional soccer teams are more likely to show superior performance if their head offices are located in population-dense regions that have a high GDP and in highly urbanized areas.

Keywords: regional development, soccer, competitiveness

(ProQuest: ... denotes formulae omitted.)

Introduction

This paper contributes to the economic literature by presenting original research investigating whether a relationship exists between regional development and the success of European professional soccer teams.

Within the literature, many articles relate socioeconomic development to the competitiveness of national soccer selections, or they relate economic growth or political institutions to the competitiveness of national teams in certain sports. However, few articles relate regional economic conditions to the competitiveness of sports teams. Such research is necessary, given that a team typically receives its main (social and financial) support from regional institutions.

This paper advances the literature in a significant way. We show that more successful teams are significantly influenced by regional factors such as the regional income per capita, the regional population density, and the degree of urbanization in the area where the team's head office is located.

These results are important for the following reasons. First, they are the first to relate specific characteristics of each European region to the competitiveness of European soccer teams. Second, they prove that place matters for European soccer teams. Finally, the results have practical implications, suggesting that European soccer teams should consider their market size and the evolving economy instead of pursuing risky operations. If European soccer teams ignore this recommendation, they may cease to exist due to speculative operations that increase their costs.

Regional Development and Sporting Competitiveness

The relationship between socioeconomic development and sports teams' performances is of increasingly interest to social scientists. However, this relationship is often studied in the context of national cases and particular moments. This trend in the research leaves a significant vacuum regarding the implications of regional development on sports teams' performances for a large range of local and regional aspects and for various periods. Therefore, our work expands the usual dimensions of the cases that have been studied thus far.

Mourão (2008) evaluated the importance of local development to the competitiveness of Portuguese professional soccer teams. His work concluded that three factors increase the probability that a Portuguese municipality will house the head office of a team that plays in the primary league: local income, the level of infrastructure, and demographics. Rathke and Woitek (2007) also claim the statistical significance of the gross domestic product and population size on the success of sports team.

However, Andreff, Andreff, and Poupaux (2008) posit that cultural differences are relevant in explaining regional differences in sports competitiveness. Differences in the number of establishments offering tourism services or differences in the level of urbanization help explain why some countries win more than others.

Downward and Dawson (1999) demonstrated that unemployment rates may be influential in the local demand for sports and, as a consequence, in the stimulus for generating top-ranked local sports teams. However, Griffiths, Bassett, and Smith (2004) demonstrated that this influence is more important in low-cost sectors than in more expensive sectors. Expensive sports are more likely to react to the long-term pattern of local economic growth than to short-term economic cycles. …

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