Thursday, 28 March 2019: 10:20 AM
Prior to 1996, the labor market for European soccer players remained relatively limited due to regulations put in place by the Union of European Football Associations (UEFA), thus hindering player mobility and diminishing the presence of foreign players in domestic leagues. Specifically, under the laws put in place by UEFA, European clubs maintained the ability to demand a transfer fee even if a player’s contract had expired. As a result, a player’s ability to switch clubs following the termination of their contract still depended on the wishes of their former employer. Additionally, UEFA enforced a “3+2 rule” which regulated the number of foreign players that could represent a club in international competition. This regulation discouraged clubs from importing large numbers of players as only five would be allowed to play in international matches. In 1995 the European's Court "Bosman ruling" transformed the market for professional soccer players in Europe as limitations placed on foreign players in domestic leagues loosened. Using data from the 2008, 2012, and 2016 European Championships, we consider the impact of player emigration on national team success. In order to measure this effect, a country’s FIFA points are regressed against that country’s calculated migration index. Control variables such as GDP, population, soccer history, previous international appearances, and average temperature, are also included in the model to prevent omitted variable bias. We use econometric analysis to interpret our findings and employ the Ramsey reset test for omitted variables and the Breusch-Pagan test for heteroscedasticity to modify our model in order to most accurately capture the relationship amongst the variables. Our findings are best understood by reflecting on the homogeneity of the data as European countries collectively achieve higher success in soccer in comparison to the rest of the world. Our main findings suggest that the emigration of domestic players to foreign leagues is not a significant factor in determining a country’s international soccer success but that the strength of a country’s domestic league, a country’s yearly average temperature, and a country’s soccer history are the most significant factors impacting national team success.