Aug 3, 2012

The economics of soccer

The main point of the paper "The Triumph of Passion: How Strong Domestic Clubs Lead to National Soccer Success" by Sahakyan, Nicholson, and Kritzberg (August 2012) is that the stronger the domestic league is, the stronger the national team is. The authors conclude:
With a few notable exceptions, like the United States and China, the larger, richer countries generally perform best at soccer. Countries with better living conditions, as proxied by life expectancy at birth, also generally perform better on the pitch. Access to international networks, as measured by the trade “openness”, has a positive impact in Europe. This is less the case for FIFA overall, mainly due to the exceptional performance of teams from South America. Higher dependence on oil rents is associated with lower soccer outcomes in Europe and North America, and conversely, with higher soccer success in South America.
The economic crisis of several European countries, and specially of Spain, might kick in in the future, affecting first the strength of the national league and then the competitiveness if its national team. On the other hand, the prospects look great for some countries in Africa where life expectancy is increasing, child mortality is decreasing, and openness is also increasing. Ghana is a case in point, the Black Stars (the national soccer team) are improving with every tournament (even though oil was discovered not long ago). The prospects are good for Mexico and Brazil. The bottom line is: the World Cup follows a strong economy. Argentina remains an enigma. 

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