Protectionism, Competitiveness and Inequality: Cross-Country Evidence from Soccer

Abstract

Using club-level data on domestic-league and international points from 73 countries, this paper achieves a policy evaluation of country-specific regulations regarding soccer success. The results show that restrictions on foreign direct investment reduce the international competitiveness of clubs, whereas restrictions on international migration policies have no significant impact on it. Domestic inequality across clubs increases with restrictions on a minimum number of home-grown players, while it goes down with restrictions on foreign direct investment or restrictions on a maximum number of foreign players. The results are robust to the consideration of other domestic regulations, market value of clubs or number of matches played.