| Article ID: | iaor20111413 |
| Volume: | 35 |
| Issue: | 1 |
| Start Page Number: | 15 |
| End Page Number: | 24 |
| Publication Date: | Feb 2011 |
| Journal: | Journal of Productivity Analysis |
| Authors: | Frick Bernd, Lee Hoon |
| Keywords: | efficiency, employment, soccer |
This paper applies stochastic production frontier models with time‐varying technical efficiency to a panel data set including hitherto unavailable information on team wage bills from the first division in German professional soccer (the ‘Bundesliga’) covering the years 1981–2003. We demonstrate that individual teams experience significant variation in technical efficiency over an extended period of 22 seasons while the league's average level of efficiency remains constant over time. More detailed analyses reveal that, first, the decision to fire or to retain the head coach is mainly influenced by changes in managerial efficiency between two adjacent seasons and, second, relegated teams on average experience considerable reductions in technical efficiency compared to the previous season.