Economics-NBA and Foreign Player Research Analysis

Economics-NBA and Foreign Player Research Analysis

Outline

Supply and demand

The market trend; the market trend for the foreign players is quite positive over the years past, and this makes it a key highlight in the determination of the economic value in NBA

Demand for players

Economies of scale; when the cost of production goes higher than the marginal cost it makes the organization quite hectic

Cost-benefit; when the NBA can benefit more from the foreign players paying the players would so prompt and affordable.

Abstract

The main aim of this research is to outline whether the hiring of the international superstars is economical to the NBA. This is quite debatable amongst the members of the team as well as the outsiders according to one’s perspective, however, the realization of the profit in the end is the main thing that will differentiate between the impact of the local players and the international players. According to the research done by Zhang, Kong & Wu (2015), it is suggested that hiring the foreign players may be more efficient as compared to recruiting the local players. It suggests that the revenue collected from the telecasts such as NBA TV is quite higher simply because of the alien superstars. The research is exploring the need that the NBA team have in recruiting the foreign players and how that may affect its economy either positive or negative. This will highly depend on the people’s views from the data collected. The data collection methods include interviews, questionnaires, discussion groups and observation. The feedback of the interviewed candidates are highly appreciated by several incentives.The study majorly focus on maximising input and minimising on cost thus economizing the team’s funds as much as the foreign players are concerned, this implies that the positive feedback will be of great interest to the general management’s action to be taken.The study utilizes ANOVA in the research model, for data presentation and SPSS for data analysis. The study is expected to cover both positive and negative effects of hiring the foreign players on NBA economy. The presentation of data includes the use of tables, for instance the SPSS output, and consideration of the statistical aspects such as the significance levels and degrees of freedom. These tools will make it possible for the data interpretation. The correlation of different variables are also considered. The research methodology of this paper includes the applicable experimental designs that will majorly depend on the variables. The presence of both dependent and independent variables are also considered. The findings of the study strongly discloses hiring of foreign players to be of greater help and economical to the team. This is due to the past assessment of the economic status of NBA team, as well as the experience from other competent teams.

Introduction

According to Berman, Shawn & Down, et al, the National Basketball Association is defined as a men’s league for professional basketball located in North America. The team is composed of players from two states that is United States and Canada, whereby Canada produce one player and the rest are Americans. The NBA is part of the United States of America Basketball (USAB), which is well acknowledged by the International Basketball Federation (FIBA), which is the national governing body of all the basketball teams in the states. The NBA team is a known and one of the biggest reliable teams in America amongst the four professional sports league in the state. The NBA players are also the most paid players in the average annual payment. The team was founded in June, 6, 1946, as Basketball Association of America, (BAA), in the New York City, and inaugurated in the season of 1946-1947, by the commissioner Adam Silver. The current name was adopted on August, 3, 1949 when they merged with the National Basketball League (NBL).In line with Caudill Franklin & Mixon, (2014), the main factor that contributed the success of the NBA team is their championship series which was the best of the seven series. The NBA championship then changed in the beginning of the year 1985, which has always attained success of the seven series. It used to play four games on its home court and three games away. The series was two games home, followed by two away, one home, one away then the last one home. The new format consisted of two games home, three away, and two home. NBA team has been having the super players over the years which has made it famous, hence building the economy of the federation.  The so called superstars are therefore very important in in revenue generation for their teams as well as other teams incorporated in the FIBA. For instance, the econometric analysis of the player, say, Michael Jordan to the NBA teams is approximated to be $53 million. The confident externality superstars may have on the other teams may lead to incompetent talent distribution. Concerning the economic status of the NBA team, Hausman, Jerry, Greggory et al (2014), suggested that an economic analysis which demonstrate the ratings of NBA games on television are noticeably higher when certain players known as the team’s ‘’superstars’’ are intricate. The NBA report released in October, 16, 2018, revealed the presence of 108 superstars’ international players from different territories whereby Canada was the most presented country, and Antetokounmpo is the player that was voted number one in which the general managers of the team preferred to start a franchise with. The foreign players shine in the NBA team hence they are considered the main reason why the Federal’s economy is still stable. The internal players are also superstars in the team, however the external players are mostly preferred due to the success made in their previous teams before they were recruited to NBA. The revenue generated by the foreign players is therefore higher as compared the one the local players generate. In most cases the people’s opinion have disclosed that the hired foreign players are that committed pair of the team as their time is always short-lived, Hausman et al, (2014). This fact make them work extra harder knowing that they may get a contract with another renounced team.

 

 

Objectives

General Objectives

To determine the cost effectiveness in hiring foreign players to utilising the local players in NBA

Specific Objectives

To check on the economic value in hiring foreign players

To determine the output in the hiring of the foreign players to the locals in terms of profits

Literature review

 

Hypotheses

Null hypothesis

Hiring the international foreign players to NBA team is quit economical as compared to the utilization of the local players.

Alternative hypothesis

Hiring the international foreign players to NBA team is not economical as compared to the utilization of the local players.

 

Methodology

Study site

The study was conducted in the New York which is the headquarters of NBA in which the opinion of different people both players and non-players were analysed.

Study Population

The study included the two inputs; national and the foreign players.

SPSS is the method of data analysis that was used to analyse data. the identification of the impact that the increase in distant players in NBA team have had on the economy of the America. in this study, the quality of the league appearing to FIBA European national basketball team standings. The major function of the federal is to combine and compile the world’s rankings hence marks the terms of the country rankings.

Results

ANALYSIS AND INTERPRETATION

 

 

Descriptive Statistics
  N Minimum Maximum Mean Variance
players who are from the country 12 1 5 3.25 2.205
non players who are nationals 12 1 5 2.92 1.902
players who are foreigners 12 1 5 3.50 1.182
non players who are foreigners 12 1 4 2.08 1.356
Valid N (listwise) 12        

 

Using the descriptive statistics from the table above, we have a sample size of 12 for each variable. The minimum value is 1 which is an indication that hiring external players is a poor idea while the maximum value is 5 indicating that hiring external players is an excellent idea. The mean for the players who are nationals is 3.25 indicating that according to them, it is a good idea to hire external players for the team. The non players who are nationals had a mean of 2.92 indicating that it’s a good idea to hire foreign players.

Players who are foreigners had a mean of 3.50 an indication that it is a very good idea to hire external players while the non-players who are foreigners had a mean of 2.08 which means that it is a fair idea, neither good or bad, to hire foreign players for the team.

Generally the mean for all the four variables is 2.92 which when rounded of is 3 which is a clear indication that it is a good and economical idea for the NBA to hire external players from other countries.

 

T-Test

 

Group Statistics
  gender N Mean Std. Deviation Std. Error Mean
players who are from the country males 7 3.14 1.574 .595
females 5 3.40 1.517 .678
non players who are nationals males 7 2.57 1.512 .571
females 5 3.40 1.140 .510

 

 

 

 

 

 

 

 

In the above table of group statistics, we have two groups of players and non-players who are both nationals grouped according to their genders. Both groups had a total of seven males and five females each. In the players who are nationals group, the males had a mean of 3.14 and females 3.40 which are very close and both indicate that it is a good idea for the NBA to hire external players. The non-players who are nationals group had a mean of 2.57 for males and 3.40 for females which indicates that the females think that NBA should hire external players for the team as compared to the male.

 

Independent Samples Test

 
  Levene’s Test for Equality of Variances t-test for Equality of Means  
F Sig. t
players who are from the country Equal variances assumed .173 .686 -.283  
Equal variances not assumed     -.285  
non players who are nationals Equal variances assumed 2.715 .130 -1.029  
Equal variances not assumed     -1.082  

 

Independent Samples Test  
  t-test for Equality of Means  
df Sig. (2-tailed) Mean Difference
players who are from the country Equal variances assumed 10 .783 -.257  
Equal variances not assumed 8.978 .782 -.257  
non players who are nationals Equal variances assumed 10 .328 -.829  
Equal variances not assumed 9.923 .305 -.829  

 

Independent Samples Test
  t-test for Equality of Means
Std. Error Difference 95% Confidence Interval of the Difference
Lower Upper
players who are from the country Equal variances assumed .908 -2.281 1.766
Equal variances not assumed .902 -2.299 1.784
non players who are nationals Equal variances assumed .805 -2.623 .966
Equal variances not assumed .766 -2.537 .880

 

Using the Levene’s test of the independent Sample test, we see that in the variable players from the national country the significant value is P=0. 68 which is greater than p=0.05 thus indicating that there is no significant differences between the variables. In the non-players who are nationals, the significant value is p=0.13 which is also greater than p=0.05 thus indicating no significant differences between the variables.

Using the t- test for equality of means, the two sided significant value (sig (2- tailed)) for players who belong to the country is p=0.78 while the significant value for non-players who belong to the country is p=0.32. in both cases, the significant values are greater p=0.05 thus we conclude that there is no statistical significant difference between the means for players and non-players who both belong to the country.

 

T-Test

 

[DataSet0]

 

Group Statistics
 
  gender N Mean Std. Deviation Std. Error Mean
players who are foreigners males 7 3.43 1.397 .528
females 5 3.60 .548 .245
non players who are foreigners males 7 2.29 1.380 .522
females 5 1.80 .837 .374

 

In the above table of group statistics, we have two groups of players and non-players who are both foreigners grouped according to their genders. Both groups had a total of seven males and five females each. In the players who are foreigners group, the males had a mean of 3.43 and females 3.6 which are very close and both indicate that it is a good idea for the NBA to hire external players. The non-players who are foreigners group had a mean of 2.29 for males and 1.80 for females which both indicates that it is fair for NBA to hire external players for the team.

 

 

 

 

 

Independent Samples Test

 
  Levene’s Test for Equality of Variances t-test for Equality of Means  
F Sig. t
players who are foreigners Equal variances assumed 3.461 .092 -.258  
Equal variances not assumed     -.294  
non players who are foreigners Equal variances assumed 3.633 .086 .695  
Equal variances not assumed     .757  

 

Independent Samples Test  
  t-test for Equality of Means  
df Sig. (2-tailed) Mean Difference
players who are foreigners Equal variances assumed 10 .802 -.171  
Equal variances not assumed 8.284 .776 -.171  
non players who are foreigners Equal variances assumed 10 .503 .486  
Equal variances not assumed 9.851 .467 .486  

 

Independent Samples Test
  t-test for Equality of Means
Std. Error Difference 95% Confidence Interval of the Difference
Lower Upper
players who are foreigners Equal variances assumed .665 -1.654 1.311
Equal variances not assumed .582 -1.506 1.163
non players who are foreigners Equal variances assumed .698 -1.071 2.042
Equal variances not assumed .642 -.948 1.919

 

Using the Levene’s test of the independent Sample test, we see that in the variable players who are foreigners the significant value is P=0.092 which is greater than p=0.05 thus indicating that there is no significant differences between the variables. In the non-players who are foreigners, the significant value is p=0.086 which is also greater than p=0.05 thus indicating no significant differences between the variables.

Using the t- test for equality of means, the two sided significant value (sig (2- tailed)) for players who are not nationals is p=0.82 while the significant value for non-players who do not belong to the country is p=0.503. In both cases, the significant values are greater p=0.05 thus we conclude that there is no statistical significant difference between the means for players and non-players who both belong to the country.

 

Discussion

The hypothesized increment in the foreigner’s players in the NBA has got no significant on the salary of the domestic players. The number of economic mechanisms that may be practised to cost cut the NBA expenditure should be followed keenly. According to the results obtained from the analysis, the findings reveal that the increases of the alien players do not impact the wages of the other players. In any case if the impact will be felt, then it will be very negligible in nature. The foreign players therefore cannot be considered imperfect to the economy of the America since they help reduce economic burden by increasing the revenue generation. The foreigners have got widely varied skills which may increase the minimal product of the work of the other parties.

According to Berman et al, (13-31), there is a claim that the international players are exclusively very strong and defensive than their fellow local players hence are the main reason for success of NBA team. The international players are also believed perfectly develop their skills by participating in the professional games before they enter the draft. The American team performs better today because of the NBA stars which in this case are the international players who have the required skills as opposed to their complementary players with American origin. The increase of the international players therefore goes hand in hand with the rapid growth of the American basketball team overseas. The growth is as a result of the popularity created by foreigners since the represented countries may be watching the NBA games in support of their countrymen. The more diversified the players are, then simply defines the fame the team receives.

 

Work Cited

Hausman, Jerry A., and Gregory K. Leonard. ‘’Superstars in the National Basketball Association: Economic value and policy.’’ Journal of Labor Economics 15.4 (2014): 586-624.

Berman, Shawn L., Jonathan Down and Charles WL Hill. ‘’Tacit knowledge as a source of competitive advantage in the National Basketball Association.’’ Academy of management Journal 45.1(2015): 13-31.

Caudill, Steven B., and Franklin G. Mixon. ‘’Television revenue and the structure of the athletic contests: The case of the National Basketball Association. ‘’Eastern Economic Journal 24.1 (2014): 43-50

Richelieu, Andre’. ‘’The internationalisation of sports team brand: the case of European soccer terms.’’ International Journal of Sports Marketing and Sponsorship 10.1(2008): 23-38.

 

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