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Salary cap and National Basketball Association teams' productive performance. A two stage Data Envelopment Analysis approach under a metatechnology framework

Nikolaos, Chatzistamoulou and Theodoros, Antonakis and Konstantinos, Kounetas (2020): Salary cap and National Basketball Association teams' productive performance. A two stage Data Envelopment Analysis approach under a metatechnology framework.

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Abstract

This paper evaluates NBA team's productive performance using a two-stage approach under a metafrontier framework. The proposed approach decomposes overall efficiency into salary-cap and on-court efficiency while a structure type of heterogeneity arises in the context of East and West conferences. The inclusion of salary cap, an important contributing element, as an input allow us to examine its effect on different types of efficiency. The empirical results show that NBA teams present a diachronically performance in terms of overall, on court and salary cap efficiency. Moreover, technology gaps reduce over time while a beta and sigma convergence examination reveal a path of convergence. Finally, a catch-up index denotes a speed of convergence especially after the salary cap implementation.

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