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The impact of sporting success on student enrollment

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Abstract

In recent years, universities increasingly had to compete for talented students. Besides running other marketing activities, universities began to cooperate with local professional soccer clubs. However, there is missing evidence on the positive effects of such collaborations. One possible benefit of having a local professional soccer team in a city could be the attraction of new students. Although soccer is an important leisure activity, research insights into the relationship between professional soccer and the demand for studies are rare. In this context, we consider promotions and relegations of professional soccer clubs and their impact on student enrollment growth, since these events are exogenous and time variant leading to an exogenous change of local public goods, private goods and media attention. Focusing on public German universities, dynamic panel regressions show that promotions and relegations of the best local soccer club to the next higher or lower division significantly influence the number of student enrollments in the upcoming semester. This effect is mainly driven by exceptional promotions and relegations. Moreover, student growth is affected by other external shocks on the education system such as double graduation or the status of being an “elite university”. Surprisingly, research funds and tuition fees were found to have no effect. The results provide considerable insights for decision makers, signifying that the sporting performance of professional local soccer clubs might affect enrolment decisions and could be used as an indicator for predicting the expected number of upcoming student applications or serve as an additional instrument in marketing campaigns and recruiting activities of a university.

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Notes

  1. Among various factors, there are four key determinants of the recent increasingly tough competition between higher education institutions: (1) decreasing cultural and legal barriers (transportation, languages, Bologna policy), (2) rising comparability of higher education institutions based on available quality rankings labels and accreditation procedures, (3) higher performance-orientated allocation of financial resources within the educational system, and (4) an increasing demand for graduates (Weimar et al. 2013).

  2. For instance, the University of Bremen states at their webpage: “10 reasons to study in Bremen […] Werder Bremen: a must during your stay in Bremen. Come and see one of Germany’s—if not one of Europe’s—best soccer teams—together with another 40,000 enthusiastic supporters. An unforgettable experience” (http://www.uni-bremen.de).

  3. In this regard, predefined answers limit the number of response options, whereby important information’s on the motives of students’ university choice could be missing (Obermeit 2012; Lamnek 2005).

  4. The focus on soccer is justified by its nationwide relevance, the media coverage of individual sport teams and by the status of being by far the most popular sport in Germany. Referring to the membership numbers in 2015 (DOSB 2016), Soccer has 6.8 million members in Germany. Other team sports like handball, volleyball or basketball, might generate positive externalities, however, the extent of possible positive externalities tend to be small because the fan community is comparatively limited (Membership numbers in 2015: handball 0.8 million, table tennis 0.6 million, volleyball 0.4 million, basketball 0.2 million). Additionally, contrary to other leisure activities, soccer is a time-variant leisure good, since clubs can be relegated or promoted, which can be seen as an exogenous shock to the utility obtained from a sport club.

  5. Educational factors include the quality of academic teaching (e.g. the range of offered courses and content of teaching), care situation and student-professor ratio, the standard period of study, and alignment of the tertiary education in accordance with student employability [for Australia see Soutar and Turner (2002). For Germany see Fischer and Kampkötter (2016), Hachmeister et al. (2007), Horstschräer (2012). For UK see Abbott and Leslie (2004), Lenton (2015).

  6. These quality-driven factors primarily create a utility for the students by increasing the expected lifetime income (Fabel et al. 2002; Maringe 2006; Obermeit 2012).

  7. In line with the excellence competition run by the German government, eligible universities were awarded with up to three funding lines: “future concepts”, “cluster of excellence” and “graduate school”. We named universities that received at least one of the three funding lines as “university of excellence”. Universities that received funding for “future concepts” are usually labeled as “elite Universities”.

  8. Regarding the determinants amount of received external funds, costs of housing, standard period of study, previous literature offers no consistent finding (Büttner et al. 2003; Fabel et al. 2002; Helbig and Ulbricht 2010).

  9. Therefore, the variable distance between hometown and university is particularly important, showing a negative correlation of distance between hometown and university and the number of student applications at a specific university (Horstschräer 2012; Gibbons and Vignoles 2012).

  10. In contrast to the average ticket price (cheapest seat price) for first division soccer (25€), second division soccer (20€) and third division soccer (18€), alternative leisure activities such as Musicals (50€), concerts (40€), theater (18€), day pass aqua park (20€), day pass ski resorts (20–50€) and cinema (8–15€) seem to be associated with similar costs per visit.

  11. The total number of 77 public universities has been reduced by excluding two universities of the German armed forces (Hamburg and Munich), since an enrollment strictly depends on the entrance to the German armed forces. Hence, the demand for studying resources is not comparable to the demand for public universities.

  12. Enrollments in Germany mostly occur in the winter term and studies in Germany are usually organized as semesters.

  13. Growth rates could bias models toward smaller universities, whereas the use of absolute numbers could bias measurements toward larger universities (Cooper et al. 1994).

  14. We estimated an Im-Pesaran-Shin test and a Fisher augmented Dickey Fuller test. Both tests revealed insignificant test statistics for the absolute values (proving non-stationarity) and significant test statistics for the growth rates (proving stationarity).

  15. Data source: http://www.fussballdaten.de.

  16. If there were multiple professional clubs in a city, we focused on the most successful club. Different clubs are certainly poor substitutes; nevertheless, in no case did we observe the second best team becoming the best team over the period of observation. Hence, we assume no bias effects by changing teams of observation.

  17. During the time of observation, the German football system was restructured twice, whereby the names of the leagues and the number of teams per league changed. However, the league levels remained unchanged.

  18. Data source: http://www.genesis.destatis.de.

  19. In Germany, public universities are mostly financed by basic public funds. However, institutions can request additional public and private research funds to finance additional academic employees.

  20. The data is not publicly available and was kindly provided by the German Federal Statistical Office (DESTATIS). The growth rate of external research funds give no information about the absolute performance of the university. Despite negative relative changes, the performance of an institution in gathering external research funds might still be outstanding.

  21. In Germany, tuition fees are exogenous for higher education institutions, since the decision of charging tuition fees can only be made by the state government. Therefore, higher education institutions cannot charge individual tuition fees. If the state government decides to charge study fees, then all universities in the state are obligated to charge the same amount of tuition fees.

  22. Only Hamburg reduced the tuition fees from €500 to €375 between 2008 and 2012. However, despite that difference, we assume that this difference is only of marginal importance as the negative “signal” of charging fees remained. Consequently, we also treated the period in Hamburg in an equal way to all other periods of tuition fees by using dichotomous information.

  23. In 2006, Duisburg and Essen merged. Numbers in the previous years were aggregated. In 2005, the University of Lüneburg merged with the Fachhochschule Nordostniedersachsen. In 2013, the University of Cottbus merged with the Fachhochschule Lausitz.

  24. Some of the universities successfully participating in the first wave and applying for the second wave were not considered for grants in the second wave.

  25. No. of universities with ZK in the first wave: 9; No. of universities with ZK in the second wave: 11/No. of universities with GS in the first wave: 31; No. of universities with GS in the second wave: 30/No. of universities with EC in the first wave: 27; No. of universities with EC in the second wave: 30.

  26. For instance, if a university successfully acquired a ZK fund it also had one GS and one EC. However, only the dummy variable “Excellent ZK” is set to one, as it reflects the most valued received fund. For a university only awarded for a GS and an EC concept, only the variable “Excellent GS” is set as one.

  27. Further arguments for trend effects in student enrollment statistics are the possibility that students might follow the recommendations of their friends already studying at the relevant university or might follow universities that are currently “en vogue” (e.g. rankings).

  28. In this model, the total number is set 0 if the promotion/relegation was defined as to be exceptional.

  29. Thereby, the clubs are ranked continuously until 5th league (e.g. first place second league = 19; first place third league = 36 and so on, see Szymanski 2017), afterwards the rank is set as 200.

  30. R2 values were estimated based on a simple fixed effect model.

  31. Promotion to second division: men (2%|23%) vs women (4%|20%); Relegation to third division: men (−21%|−4%) vs women (−19%|−6%).

  32. We also incorporated dummies for participation in the Champions League and the Europa League, without finding any significant results.

  33. We also run simple fixed effect models. These models showed similar results regarding Enrollmentt−1, promotion and relegations, double graduation in the first year and the findings for the excellent initiative.

  34. One argument against the results might be the missing control for other leisure activities. However, we controlled for external shocks, which should not be correlated with the provision of other leisure activities in the short run. In the long run, a successful sports team should certainly attract additional “satellite” leisure supplies such as bars or sport facilities, which attract additional students. Within 4 months, however, between the announcement of the shock and the enrollment activities, other leisure opportunities should be seen as constant. Furthermore, the opposite case (more leisure activities lead to sporting success and then to increasing the appeal of studying) does not seem convincing at all. To sum up this point, we assume the shocks through sporting success as to be exogenous, for which reason missing information regarding leisure statistics should cause no problem of omitting variable bias.

  35. The incoming cash flows are usually no pure profits, since the 18.000€ are compensations for costs associated with the education of the students. However, if the students attracted by soccer clubs are assumed to be “on top” students, than the compensation fees are almost additional profits since an extra of 58 students will only cause little variable costs (e.g. opportunity costs), while fix costs (staff and facilities) are already paid. In addition, faced with a great number of student dropout in the bachelor programs at German universities, it seems reasonable to assume that the marginal benefits of an additional student might exceed the additional expenses due to the increasing number of students (Heublein 2014).

  36. One might argue that, women are less likely to be soccer fans and thus the female enrollment rates should be less affected by soccer success. However, several arguments support our findings. First, female soccer has become quite popular among women with increasing female amateur clubs. Furthermore, women might be attracted by the additional non-use public good effects and by media attention, which might applies to non-soccer fans as well. Women might also follow their male friends who were attracted by soccer success.

  37. Average population of clubs with promotion to first division: 1,022,862 (r = 0.12)/clubs with relegation from first to second division: 991,343 (r = 0.12)/clubs with promotion to second division: 263,594 (r = −0.06)/clubs with relegation from second to third division: 254,827 (−0.06). The overall correlation between population and student enrollments is low (r = 0.23).

  38. Most German cities are rather unknown to foreign students. One particular way to become “known” is through the media coverage that is caused by participation in the first division. Often, only the top European divisions are mentioned on public television programs. If a university loses this means of prominence, foreign students might neglect these universities due to receiving less information about the city.

  39. For instance, while sporting success is widely discussed in Germany in every newspaper and news source, foreign students would have to search for information in special websites in their native language.

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Weimar, D., Schauberger, M. The impact of sporting success on student enrollment. J Bus Econ 88, 731–764 (2018). https://doi.org/10.1007/s11573-017-0877-1

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  • DOI: https://doi.org/10.1007/s11573-017-0877-1

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