Diversity and Performance in Teams: Evidence from 10 Seasons of German Soccer
Abstract: This paper is concerned with the effects of diversity on individual and team performance, asking: (1) How does diversity in ethnic, national and linguistic background of workers affect individual and collective performance in a production environment characterized by high interdependence? (2) Do the effects of diversity vary with tasks? (3) Does common experience of workers – joint tenure on a team – alter the effects of diversity? Does this vary with tasks and workers’ place of origin or majority/minority status? We analyze data for 28 teams and 1,723 players that played 6,120 in the Bundesliga during the decade 2000/1-2009/10, games, for a total of 77,406 player/game observations. We study game scores and player objective performance ratings. We control for players’ place of origin, talent, position and demographics, team fixed effects, manager, opposing team, and other factors. The overall effect of diversity on performance is small. Performance effects of diversity at the individual player and team level can be identified when teams are disaggregated into subgroups, by domestic versus foreign born players (German vs. non-German) and by task or position (defense, midfield and forward), and when the role of joint tenure or time spent together on the team is incorporated in individual games, when injuries, suspensions and other random factors affect the deployment of players and controlling for team fixed effects and talent. Longer tenure of German players in conjunction with team diversity contributes to team and individual performance whereas the opposite holds, and with greater strength, for non-German players. Diversity in the defense is good for all players’ and team’s performance, and this effect is enhanced by greater joint tenure of defenders, whereas the opposite is more or less true of the forward team.
