Study of European football shows the value of skilled immigrant workers to organizations

Hiring skilled immigrant workers can give organizations a measurable competitive edge—not just because of their specific skills, but also because of the increased strategic options they help unlock for employers.

To quantify this effect, Olin researcher Seth Carnahan and his colleagues focused their attention on the impact of foreign-born players signed to European professional football clubs (soccer teams, in American parlance).

Their resulting study, “Does Employing Skilled Immigrants Enhance Competitive Performance? Evidence from European Football Clubs,” has been accepted for publication in Management Science.

A unique, effective setting

Carnahan, an associate professor of strategy, said it’s difficult to measure the impact of immigrant employees on a typical organization’s success. Is a company that hires more foreign workers successful because of those new employees? Or is it because it has the additional resources to navigate the complex and expensive immigrant hiring process? Maybe the business is successful for other reasons and therefore attracts more foreign workers.

He said football clubs provided a particularly effective setting to study these questions for him and his coauthors—Britta Glennon and Exequiel Hernandez of Wharton Business School and Francisco Morales of Universidad de los Andes in Santiago, Chile.

The team focused on the five most successful European leagues: the English Premier League, the Spanish Liga, the Italian Serie A, the German Bundesliga, and the French Ligue 1. These leagues compete for the most talented players in the world.

He said the leagues all set different limits on how many foreign-born players they can hire, as well as what constitutes a “foreign” player—rules that have changed over time.

“For example, in France in the mid-2000s, there was a rule change that allowed countries that were part of the Cotonou agreement (a treaty between the EU and nations in Africa, the Caribbean and the Pacific Islands) to no longer be counted as foreign-born,” Carnahan said. “So, it was easier for a French soccer team to put foreign-born players on the pitch.”

Carnahan and his colleagues tracked the number of foreign players on each team from year to year, as well as how these teams performed in inter-league competitions.

“We find that clubs that have more lax immigration rules tend to defeat their opponents,” he said. Specifically, they estimated that adding one immigrant player to a team could improve a club’s performance in a given inter-league match by 0.12-0.22 goals and increase the probability of winning that match by 2-5%.

The researchers dug into granular statistics about individual players’ performance, including scoring, passing success and frequency as a starter. They found that immigrant players had greater success in these areas than domestic players.

Carnahan noted some potential reasons that immigrants might perform better. Clubs face significantly higher obstacles to recruiting them, so they would have to be much better players to be worth that extra effort. And the pool of global talent is simply deeper than that of any individual country: The number of top-tier players in France or Germany or Spain is dwarfed by the number of comparable talents throughout the world.

A talent for collaboration

The researchers also looked at a novel effect of hiring immigrant players: the increased strategies they open up for teams.

“Different countries have different styles of play that you learn when you’re younger and coming up through the ranks,” Carnahan said. “My coauthors describe how having players from different national backgrounds on the pitch can lead you to deploy different styles of strategies.”

The researchers used data about how often teams passed the ball to show that those with more immigrant players had more unusual strategies and improved performance.

Carnahan said immigrant players may be more open to such strategies as a result of their backgrounds, citing existing psychology research that shows people with multicultural experience excel in making connections among different groups of people.

“They’re used to collaborating with people who are different from themselves,” he said. “They’re more comfortable passing the ball to different kinds of people, which increases their chances of scoring.”

When attempting to apply these results outside the sports world, Carnahan said they are more relevant to industries that hire workers with unique skills.

“You’ll see this in the H1B (visa) setting very often—professors with a particular type of computer science expertise that maybe only a few people have. Or startups hiring software engineers to do a particular type of coding.”

He said the results wouldn’t be as relevant to industries that hire foreign workers for lower-wage jobs. “It’s not about labor that Americans don’t want to do—it’s more about jobs that not as many Americans have the skills to do,” he said.

Carnahan is working with his coauthors on a follow-up study looking at what leads some organizations to be better at assimilating immigrant footballers. “One thing we find is that when the club’s manager is also an immigrant, immigrants tend to perform better,” he said.

Individually, the researchers are also examining the impact of immigrant workers in other industries. “Certainly, to make this issue more salient, you would have to use data that’s not just about football,” Carnahan said.