Financial Inequality among Firms: Globalization and the Concentration of Money and Success in European Football Stefan Leggey Steffen L¨ohrz June 14, 2019 Abstract Football has an enormous following in Europe with more than 100 million fans in the big five European markets alone and numerous more across the continent. It is also in- sightful from an economics point of view. At the core, it represents a market in which all firms compete domestically and a small subset of them sells its products and services on an international market as well. Furthermore, football is characterized by workers of dif- ferent skill level, the best of which are highly mobile across countries. In the present study, we examine two features of this market. Using a novel data set, we first document the large and increasing financial inequality among European football clubs. Subsequently, we show how strongly the inequality in financial means correlates with clubs' performance and results. JEL Classification: firm inequality, football, labor mobility Keywords: F22, J44, J61, L83 y Stefan Legge, University of St.Gallen, Department of Economics, SIAW Institute, Bodanstrasse 8, CH- 9000 St.Gallen, Switzerland. (e-mail:
[email protected]); z Steffen L¨ohr,University of Duisburg-Essen, Lotharstr. 53, D-47057 Duisburg, Germany. (e-mail: steff
[email protected]) 1 Introduction Football is more popular than any other sport in the world. According to Nielsen, more than forty percent of people 16 or older in major population centers around the world consider themselves interested or highly interested in following football.1 However, football is not only interesting for fans but also for economists.