Impact of Importing Foreign Talent on Performance Levels of Local Co-Workers

When skilled labour is imported, skill levels of local workers may be raised by contact with new techniques and practices. European basketball offers an opportunity to test this general claim. For a panel of 47 countries observed over more than twenty years, we model probability of qualification for, and performance in, international tournaments. We demonstrate that an increase in the number of foreigners in a domestic league tends to generate an improvement in the performance of the national team (which comprises only local players). Given this, we develop a theoretical framework for how a regulator might take this into account.