Does Employing Skilled Immigrants Enhance Competitive Performance? Evidence from European Football Clubs
We investigate the effect of employing skilled immigrants on the competitive performance of organizations by studying European football (soccer) clubs in Germany, Italy, France, England, and Spain from 1990-2020. Detailed microdata from this setting offers unusual transparency on the migration and hiring of talent and their contribution to collective performance. Further, country-level rules govern how immigrant players are defined and the number of immigrant players that clubs can deploy. Using changes to these rules as the basis for instrumental variables, we find that the number of immigrant players in the club’s starting lineup has a positive local average treatment effect on the club’s performance. We find evidence that immigrant players enhance club performance because they exhibit higher individual talent than natives and because they enable their clubs to deploy a wider variety of on-field strategies and actions. The latter mechanism is novel to the literature.