Team Payroll, Competitive Balance, and Team Performance in the Japan Professional Baseball League: A Study using 1993-2004 Panel Data.

This research aimed to explore how a team payroll has an effect on team performance as measured by the winning percentage using panel data of the Japan Professional Baseball League; separately for each of the Central and the Pacific Leagues. The major finding is that a team payroll has a remarkably positive impact on the outcomes of Pacific League team performance; however it has none on central League teams. The reason why such different results are brought about is that the popularity of the Central League decreases the incentive to allocate the resource of teams efficiently with an objective of win maximization.