Does team racial composition affect team performance in the NBA?(ANTHOLOGY)

Does Team Racial Composition Affect Team Performance in the NBA?

Many amateur and professional sports teams ate composed of athletes flora different racial and demographic groups. In the National Basketball Association (NBA), for example, teams ate composed of Affican-Americans, Caucasians, South Americans, Europeans (East and West), and Asians. Some have argued that diversity may lower psychological attachment and lead to less frequent (not to mention less effective) communication with fellow workers, all of which can adversely affect firm performance (see, for example, M. Kilduff, R. Angelmar and A. Mehta (2000), "Top management-team diversity and firm performance: examining the role of cognitions," Organization Science, 11(1):21-34). In this study, we test the hypothesis that the potential negative cross-group effects due to team diversity can be overcome by the necessary cooperation inherent in team sports. This hypothesis implies that team racial composition, however diverse, should have no effect on team performance. The extent to which workers in general (and professional basketball players in particular) ate unaffected by group diversity is the empirical question that motivates this research note.

To quantify the degree of diversity, we use the Herfindahl-Hirschman index (hereafter HHI), a common measure used in studies of industrial concentration and market structure. Here, we consider its use as it applies to racial composition within a team, given by the formula HHI = [n.summation over (i=1)] [G.sup.2.sub.i], where [G.sub.i] is the fraction of team players who belong to racial or demographic group i. The five groups include: African-Americans, Caucasians, East Europeans (from Croatia, Georgia, Latvia, Lithuania, Russia, Serbia and Montenegro, and Slovenia), Asians, and other foreign-born players who did not play either high school or college basketball in the United States. Only NBA players with at least 800 minutes of court time in a given season for a given team were included on a team roster. If all players are, say, African-American, HHI attains its maximum of 1.0. The value declines (hence, more diversity) with increases in the number of players from other racial/demographic groups. All data on players' place of birth (including a picture of the player), U.S. high school or university affiliation (if any), and minutes of playing time per season are from http://www.nba.com/players.

For each of the last three seasons (2007-08, 2006-07, and 2005-06), an NBA team's regular season win percentage (WINPCT) was regressed against the team's HHI and the team average number of years players with at least 800 minutes of court time played in the pros (YEARS). The regression results for the 2007-08 season were as follows (t-values in parentheses):

The regression results for the previous two seasons also show that HHI is not statistically significant (p=.143 in 2006-07 and p=.349 in 2005-06), although team experience is, as measured by the team average number of years in the pros (p=.002 in 2006-07 and p<.001 in 2005-06).

Team diversity in the NBA appears to be neither an asset nora liability to team performance. The last three NBA Champions--Boston Celtics (2007-08), San Antonio Spurs (2006-07), and Miami Heat (2005-06)--had widely different HHIs of 1.0, .360, and .781, respectively.

Finally, if players have more difficulty recognizing or communicating with members of other racial/demographic groups, then the number of turnovers per game should be higher for more diverse teams. Yet, when all 30 NBA teams are divided into two groups, teams above and below the league-wide median value of HHI, there is no evidence in any of the three seasons that more diverse teams commit on average significantly more turnovers per game than do less diverse teams (p=.382 in 2007-08, p=.355 in 2006-07, and p=.574 in 2005-06).

JEL L83. J15

Published online: 10ctober 2008

J. B. Weiss ([mail]) * P. M. Sommers

Department of Economics, Middlebury College, Middlebury, VT 05753, USA

e-mail: psommers@middlebury.edu

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