title: Essays in Economics of Managers: Insights from Professional Football Leagues
Creators: name: Narita, Kaori
Publisher: name: University of Liverpool Repository
Year: 2022

description: This thesis presents a collection of papers that address issues related to leadership succession and the role of managers in firm production by employing data from professional football leagues. Professional sports produce valuable data that can be seen as an instrument to test economic and management theories. Leadership research can particularly benefit from such data since the role played by a manager in professional sports clubs are similar to a leader's role in a more general context, such as that of CEOs in corporations. However, an important methodological concern related to observational studies is the fact that events such as leadership succession do not occur randomly. One of the remedies for this problem is a propensity score analysis. The use of the method is yet sparse in leadership research and related fields despite its applicability. Chapter 2, therefore, discusses the method and demonstrates how to implement the method using the real-world example of head coach changes in Italian professional football. The previous studies in leadership succession in professional sports primarily focus on establishing whether managerial replacements improve a club's performance. However, conditions under which such decisions can bring about favourable outcomes are not well understood. Therefore, the empirical example included in Chapter 2 adds to the previous analysis by viewing a leadership change as simultaneous changes in leader characteristics, such as their age, experience, and association with the organisation. The study finds that differences between new and dismissed managers in certain characteristics do affect the effectiveness of managerial succession. Furthermore, Chapter 3 analyses the decision to replace a manager more than once within a season in order to understand whether the frequency of replacements can determine the effectiveness of such decisions. In particular, we separately estimate the causes and consequences of the first and second dismissals of a manager in a given season by employing machine learning and the inverse propensity score weighting method. The results suggest that clubs may benefit from the first replacement, whilst the second replacement has no significant effect on performance, despite the latter decision being made more cautiously. Chapter 4 diverts from the specific issues related to leadership succession and examines the role of leaders themselves in firm production. To do so, we estimate a football club's production function, where labour and capital inputs are explicitly measured using individual players' historical performance and a club's estimated transfer budgets. This allows us to quantify how much an individual manager adds to a club's performance, given the resources at his disposal. In addition, we take into account the randomness of the outcome by employing event data within individual matches. Our analysis shows that having different managers can have both economically and statistically significant impacts on a club's outcomes.