Status, Peer Influence, and Racio-ethnic Diversity in Times of Institutional Change: An Examination from European Labour Law

Abstract

This paper employs institutional theory as a theoretical lens and examines the role of status and peer influence on diversity following a change in European labour law in 1995. This change in European labour law, well-known as the Bosman ruling, significantly increased labour mobility in European soccer. The ruling lifted restrictions on the number of foreign players that soccer teams could recruit and eliminated compulsory transfer fees for players whose contracts had ended. We demonstrate that the Bosman ruling, while increasing the number of foreign players on a team, did not uniformly affect all teams. Our investigation indicates that the increase in racio-ethnic diversity in teams depended on the status of teams and on peer influence (the behaviour of similar teams). This setting, though specific to European labour law in the context of soccer, allows an examination of the complex interplay between racio-ethnic diversity, status, and peer influence in a period of institutional change.