Football Technology Transfer: The Effect of Participating in Top-level Football Leagues on FIFA World Ranking Points

Abstract

I estimate the effect of participation in top-level football leagues on national teams’ FIFA world ranking points. Taking each national team’s FIFA world ranking points as a proxy for the proficiency of a nation in international football, I examine this football technology transfer effect. For this purpose, I use panel data from FIFA member nations for 1999-2006 to control for unobserved nations’ specific effects. Additionally, allowing for reverse causality, by which players in powerful national teams tend to play in a top league, I use real purchase power parity as an instrumental variable. When including all nations in the analysis, the number of top-league players has a small negative effect, although the estimated coefficient is not significant. By contrast, for “developing” nations (in football terms: i.e., Africa, Asia, North America, and Oceania), the number of top-league players has a small positive effect. If African national teams are excluded, the skills transfer effect in developing nations strengthens substantially. In particular, if an Asian player plays in a top-level league, the FIFA world ranking points of his national team increase by around 30%, and the estimated coefficient is significant at the 10% level.