Football and Economy Relations at the International Level
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Football and economy relations at the international level Roberto Gásquez Mendoza ADVERTIMENT. La consulta d’aquesta tesi queda condicionada a l’acceptació de les següents condicions d'ús: La difusió d’aquesta tesi per mitjà del servei TDX (www.tdx.cat) i a través del Dipòsit Digital de la UB (diposit.ub.edu) ha estat autoritzada pels titulars dels drets de propietat intel·lectual únicament per a usos privats emmarcats en activitats d’investigació i docència. No s’autoritza la seva reproducció amb finalitats de lucre ni la seva difusió i posada a disposició des d’un lloc aliè al servei TDX ni al Dipòsit Digital de la UB. No s’autoritza la presentació del seu contingut en una finestra o marc aliè a TDX o al Dipòsit Digital de la UB (framing). Aquesta reserva de drets afecta tant al resum de presentació de la tesi com als seus continguts. En la utilització o cita de parts de la tesi és obligat indicar el nom de la persona autora. ADVERTENCIA. 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In the using or citation of parts of the thesis it’s obliged to indicate the name of the author. 2017 PhD in Economics Football and economy relations at the international level Roberto Gásquez Mendoza Roberto Gásquez Mendoza s onomic c PhD in E PhD in Economics Thesis title: Football and economy relations at the international level PhD student: Roberto Gásquez Mendoza Advisors: Vicente Royuela Mora Patricia García-Durán Huet Date: June 2017 “We are all one. Everything is energy” Alejandro Gásquez iii iv Preface and acknowledgements: This PhD thesis is the result of years of research and dedication. I am very proud to choose this doctorate research. Quite young, I focused my energy on becoming a professional tennis player. I will always be grateful to my brother Alejandro for helping me understand (when I was 17) that I had to prioritize my studies over a professional career in tennis. Gracias Fabio. I also want to thank my wife, Meri. We have been together since we were 18 and she has instilled in me the value of excellence while providing unconditional support and love. Likewise, I am indebted to my parents for always giving me all the facilities and support to study. In particular, I would like to thank my father Thutam for asking me every day how the doctorate was going. Thanks to my grandmother Sebastiana, who taught me that effort always brings a reward. On a more professional note, I am grateful to the University of Barcelona for granting me an APIF grant for 4 years to facilitate my doctorate studies. Furthermore, I show appreciation to the members of the doctoral commission and their work in the monitoring of my PhD thesis. The subject of analysis of this PhD thesis is the result of my passion for football, embodied in my irrational fanaticism for RCD Espanyol, and above all of Doctor Francesc Granell’s imagination. During one of the many meals we had at the faculty's eating hall, he said to me: "You are always talking about football, and you have been teaching Economic Development and International Economy. Why don’t you join the two topics that you are most passionate about and study them?” I was incredulous. Was he seriously proposing that I did an economic thesis about football? As I realized over time, he was very serious and so was the topic of research he proposed. I started to work on Dr. Granell’s idea and asked Dr. Vicente Royuela, an exceptional economist and specialist in econometric methods, to direct my PhD thesis. I have learned a lot from Dr. Royuela, who has always treated me v with respect and dedication. His monitoring of my efforts has been exhaustive (without him, I would not have finished my PhD thesis, because when one has another full-time job, it is very easy to leave research aside). My gratitude also to Dra. Patricia García-Durán, who co-directed my PhD thesis and whose support has been fundamental. I would also like to emphasize all the help given to me by the rest of the members of the University of Barcelona Chair of International Economic Organization, a real family for me, particularly Doctor Granell, Dra. Montserrat Millet and Maria Luisa Justo. I am also obliged to Dr. Peter Macmillan for his advice and dedication during my visiting research at the University of Saint Andrews (Scotland). Thank you with all my heart to all those mentioned, and many more, since without you it would have been unimaginable to carry out this PhD thesis or to already have two publications in journals of international reach. Finally, I want to double thank both my brother and wife. Without my brother, I would neither have reached a doctorate, nor met my wife. Meri’s love has provided me with the calm and understanding necessary in the difficult moments of my investigation. Finally, I would also like to show my gratitude to my daughter Nausica. Her arrival gave me the last necessary incentive to finish my PhD thesis. vi A mi primo Toni vii viii Contents: List of Tables xi List of Figures xiii Chapter 1: Introduction 1 1.1 Context and motivation 1.2 Research hypothesis 1.3 Methodology 1.4 Structure and main findings References Chapter 1 Annex Chapter 1 Chapter 2: Is Football an Indicator of Development at the International Level? 13 2.1 Introduction 2.2 Literature review 2.2.1 Development influencing sporting success 2.2.2 Sporting success influencing development 2.3 Building up a theoretical framework of analysis 2.4 Data 2.5 Empirical model 2.6 Conclusions References Chapter 2 Annex Chapter 2 Chapter 3: The determinants of international football success: A panel data analysis of the Elo rating 43 3.1 Introduction 3.2 Literature Review 3.3 Theoretical Framework 3.4 Data 3.5 Results 3.5.1 Basic Model 3.5.2 Additions to the Model 3.5.3 Time to Build ix 3.5.4 Sensitivity Analysis and Robustness Checks 3.6 Conclusions References Chapter 3 Annex Chapter 3 Chapter 4: Does having more foreign players influence the success of football clubs? 69 4.1 Introduction 4.2 Literature Review and Stylised Facts 4.3 From Theory to Empirics 4.4 Data 4.5 Results 4.6 Conclusions References Chapter 4 Annex Chapter 4 Chapter 5: Conclusions Main Findings, Implications for Policy Makers and Future Research 93 Methodological Appendix 1: Method for calculating the current FIFA rankings (methodology since 2006) 97 Methodological Appendix 2: The World Football Elo Rating System 98 Methodological Appendix 3: Countries in each confederation 100 Methodological Appendix 4: Using market value as a proxy for budget for salaries 101 Methodological Appendix 5: Identification strategy to incorporate an instrumental variable 102 Resumen en español 105 Full list of references 109 x List of Tables Chapter 1: Table A.1. Contribution of sport to the millennium development goals……...10 Chapter 2: Table 2.1. Correlation between FIFA ranking, log GDP and HDI…………...22 Table 2.2. Descriptive statistics……………………………………………...25 Table 2.3. Correlation Raw Data (overall variation)………………………….25 Table 2.4. Correlation, Country and Time Effects Controlled Data………….25 Table 2.5. Panel regressions – log(GDP)…………………………………….26 Table 2.6. Panel regressions – HDI………………………………………….28 Table 2.7. Fixed effects estimation results for different development levels….29 Table A.2.1: Countries considered…………………………………………..39 Table A.2.2: Fixed effects estimate. Endogenous variable log(GDP)………....40 Table A.2.3: Fixed effects estimate. Endogenous variable Hybrid HDI…..…..41 Chapter 3: Table 3.1: Panel estimation………………………………………………….55 Table 3.2: Estimating additions to the model………………………………...58 Table 3.3: Elo ranking versus FIFA ranking (1993-2012)………………….…61 Table A.3.1: Countries considered…………………………………………..65 Table A.3.2: Variables used………………………………………………….66 Table A.3.3: Estimating lag the socioeconomic variable………………….......67 xi Chapter 4: Table 4.1. World top 10 teams according to Elo Ratig score. February 2016….77 Table 4.2.