Do Football Transfers Actually Improve Performance?

Abstract

This thesis aims to utilize publicly available data to examine the predictive effect of player transfers on performance at the club and player levels. If the transfer market is operating efficiently, the transfer fees clubs are paying should, on average, match the return on performance they expect by acquiring those players. To perform this analysis, I consider both transfer dummy variables, indicating whether a transfer has joined a given club in a particular season, and transfer spending data, consolidating purchases and sales into a net transfer expenditure measure for each club. Based on the purpose of the transfer market, I expect that, on average, higher spending results in greater improvements in club performance. However, the results suggest that transfer spending has minimal or negative effect on player and club performance on average.