The Effect from National Diversity on Team Production - Empirical Evidence from the Sports Industry

The purpose of this paper is to analyze the effect of nationalvariety within a team on team performance. Due to ãlanguage incompatibilityÒ, the teamÕs corresponding productivity should be expected to decrease with the number of nationalities, as misunderstandings would occur more often. On the other hand, the introduction of further nations and therefore further aspects of different ÒculturesÓ might lead to additional skills within the team. Based on a new data set from professional German soccer for the period 2001/02 until 2005/06, we test this hypothesis on a seasonal individual team basis (N=90). Our results do not provide empirical evidence that national diversity among members in soccer teams significantly influences a teamÕs performance (measured by its league rank at the end of a season). Interestingly, this finding is not driven by the fact that different nationalities do not possess significantly different skills, but by the non-relevance of these skills for team success at the end of the season. However, a closer look reveals that the influence from national diversity on team performance depends on the nature of the underlying task: By increasing the number of different nationalities within the defensive block, team success will deteriorate ceteris paribus.