Buying success or redistributing payment: bidirectional causality in Korean Professional Baseball League

Jye Shyan Wang, Chih Fu Cheng, Wen Jhan Jane

Research output: Contribution to journalArticle

Abstract

Salary payments are important to us for understanding both the relationship and the causality between salary structures and team performance in labour market theory. Using salary data from the Korean Professional Baseball League (KPBL), this paper conducts Panel Granger tests to investigate the causality between pay and performance. Our empirical results show that the causality only runs from the dispersion of salary payment to team performance, but not vice versa. Moreover, the evidence also shows that total salary does not cause team performance, and vice versa. Therefore, payrolls cannot buy wins, and wins cannot bring payrolls in the KPBL.

Original languageEnglish
Pages (from-to)247-260
Number of pages14
JournalEurasian Business Review
Volume4
Issue number2
DOIs
Publication statusPublished - 2014 Dec 1
Externally publishedYes

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Keywords

  • Equity theory
  • Korean professional baseball league
  • Panel Granger causality test
  • Salary regulation
  • Tournament theory

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics, Econometrics and Finance (miscellaneous)

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