Econometric Analysis of the Relationship Between English Premier League Teams' Transfer Market Activity and Levels of On-field Performance

Abstract

The transfer market and player transfers play a central role in the realm of football and even more so in the English premier league which is often referred to as the paragon of football leagues. Though the transfer market plays such an integral role in the realm of football, it has hardly been researched empirically. This paper aims to observe the link between the transfer market and the performance of teams participating in the English premier league in the last 10 years by using regression analysis. From the regression analysis, it was concluded that Net expenditure, the difference in total transfer income, and total transfer expenditure can positively impact a team’s performance while the number of transfers a team completes and a higher payroll can negatively impact the team’s performance.