infonet-economy

Theory predicts that the interaction type within a team moderates the impact of talent disparity
on team productivity. Using panel data from professional German soccer teams, we
test talent composition effects at different team levels characterized by different interaction
types. At the match level, complementarities are expected due to the continuous interaction
of the fielded players. If the entire squad is analyzed at the seasonal level,
substitutability emerges from the fact that only a (varying) selection of players can prove
their talent in the competition games. Holding average ability and unobserved team heterogeneity
constant, we find that the players selected to play on the competition team should
be rather homogeneous regarding their talent. However, if we relate talent differences
within the entire squad to the team’s league standing at the end of the season, talent disparity
turns out to be beneficial.