Internal promotion and the Bosman ruling: Evidence from the English Premier League

Abstract

AbstractThe analysis of English Premier League clubs' reliance on internal versus external sources for competitive game‐time opportunities to unproven players is motivated by relevant labour economics literature. Two uniquely created data sets are utilized to establish robust results supporting the notion that certain clubs' youth programmes provide greater first‐team playing time opportunities through internal sources. This information is further used to create a unique index for youth development reputation of the clubs. In addition to this index and the original data set, this paper creates a link between existing internal versus external hiring labour literature and a club's decision to give game‐time opportunities to new players externally or resort to their internal hiring. Foreign sourced players become more prevalent in the league after the Bosman ruling, and their probability of game‐time selection is positively correlated with club stature. Survival analysis results also establishes a presence of heterogeneity at the youth club level that signals differences in player career prospects generated by their youth training, which is supplementary to the number of opportunities given to youth players by these clubs. This model also shows that the Bosman ruling positively impacts the career duration of youth players as opposed to its negative effect on game‐time selection, which signals that even though competitive game‐time opportunities are more limited, the quality of internally sourced players is higher as a result of increased competitive pressures brought upon by the Bosman ruling.