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doi: 10.1111/aepr.12130

Asian Economic Policy Review (2016) 11, 115

The Economics of Sport in Asia:

Editors Overview
Takatoshi ITO,1 Kazumasa IWATA,2 Colin MCKENZIE,3 Marcus NOLAND4
and Shujiro URATA5
1
Columbia University, 2Japan Center for Economic Research, 3Keio University, 4Peterson Institute for
International Economics and the East-West Center and 5Waseda University

JEL codes: F5, F69, I24, J00, J16, J21, L83, M14, O11, O18, R53, Z13, Z20, Z21, Z28

1. The Economics of Sport in Asia

Sports are a massive economic and social phenomenon. Counting gate revenues, sponsorship, media rights, and merchandising, it has been estimated that in 2015 professional
sports globally will generate $145 billion in revenue, $28 billion of which will be in Asia
(PWC, 2011). Revenue figures bounce around from year to year depending on whether a
mega-event such as the Olympic Games or the FIFA World Cup is scheduled. Since Asia
is scheduled to host the Olympics in 2018 (Pyeongchang), 2020 (Tokyo), and 2022
(Beijing), one can safely expect that Asias prominence in the global sports industry will
rise further over the medium run. Adding in amateur sports, equipment sales, etc., the
revenue figures would be even higher.
In recent decades, sport has both contributed to and been shaped by globalization.
To take one prominent example, the Olympic Games are the largest regularly scheduled
international mass gathering, with hundreds of thousands of on-site participants including athletes, team officials, press, and spectators, with billions more people following the
event via the media. At the most recent Summer Olympic Games in London, 10,500 athletes 4700 of which were women from over 200 nations participated. The Olympic
Games are among the few truly global events and as such wield an enormous ideational
influence on popular culture and public attitudes.
Historically, hosting such mega-events has been a coveted honor (although as
hosting costs mount, taxpayers are beginning to have second thoughts), and can act as a
powerful signal that an emerging power has arrived on the world stage. This symbolism
was most recently evidenced in China in 2008, when 25,000 accredited media personnel
from 159 countries, joining hundreds of thousands of foreign visitors, descended on
Beijing to beam back the unfolding drama to billions of viewers at home.
But just as hosting such mega-events can be used to convey soft power, the process of
globalization is changing the economics of sport, creating a more genuinely worldwide
market for athletic talent, and to a lesser extent corporate ownership. The globalization
of the labor market can be seen in the explosive growth in the salaries of professional
athletes (Lawrence, 2015). Cross-border investment in professional team ownership is
Correspondence: Colin McKenzie, Faculty of Economics, Keio University, 2-15-45 Mita, Tokyo
108-8345, Japan. Email: mckenzie@z8.keio.jp
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becoming more common as well. Moreover, the exposure of spectators to high-caliber

foreign and women athletes through this globalization of competition can affect attitudes toward gender, put the sending countries on the map so to speak, and inform
public attitudes toward the sending countries as well.
This issue of the Asian Economic Policy Review addresses the topic of the economics
of sport in Asia in several dimensions. Two of the papers, Szymanski (2016) and Jang
and Lee (2016), address the development of professional leagues in two highly popular
team sports, football (soccer) and baseball. Two of the papers, Miyoshi and Sasaki (2016)
and Noland and Stahler (2016), address mega-events: one paper is a retrospective examination of the economic impact of Japan hosting the 1998 Nagano Winter Olympics,
while the other paper investigates the determinants of Asian athletes growing success in
the Olympic Games and forecasts medal counts for the 2016 Rio Summer Games. The
final two papers, Kotschwar and Stahler (2016) and Cha (2016), address broader impacts
of sport: how womens participation in sport may affect subsequent labor market outcomes, a particularly salient topic given the demographics of Asia and the desire by
some governments, most notably the government of Japan, to boost female labor force
participation and labor market success, and the role that sports can play in international
relations.
2. Summary of Papers and Discussions
This section summarizes the papers presented at the Twenty-First Asian Economic
Review Conference held in Tokyo on April 11, 2015, the comments by the assigned discussants, and the general discussion of each paper.
2.1 Szymanski on professional Asian football leagues and the global market
Stefan Szymanski (2016) examines the prospects for the development of professional
football leagues in Asia, and in particular whether an Asian league will emerge that could
threaten the dominance of European leagues, such as the English Premier League and
Spains La Liga. Szymanski argues that this will not occur unless wealthy individuals in
Asia decide to invest heavily in the sport without expecting to generate a significant
financial return.
Szymanski analyzes the nature of equilibrium in the football leagues given the structure of the game. According to Szymanski, the system of promotion and relegation,
which in principle allows any club to rise to the highest level within their country, has
promoted a hyper-competitive system in which clubs generate no better than zero
profits. In contrast with the American major league sports, there are few mechanisms to
limit competition for players or to limit the financial incentives to win. The outcome of
this competition has been the emergence of a small number of dominant clubs in each
league, while the majority of clubs struggle to compete financially. Szymanski argues that
this outcome is consistent with the predictions of John Suttons endogenous sunk cost
theory, where dominance emerges not as a result of the accumulation of advertising
expenditure, but from the accumulation of spending on player talent.
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Within this competitive structure, professional leagues in Asia are relative latecomers,
which has meant that European leagues have thus been able to establish a following
among Asian fans, a first-mover advantage that will be hard to overcome. Historically
many of the worlds best players have originated from Europe, but football has also been
at the forefront of globalization. As an international market for playing talent has
emerged, European clubs have had the economic power to attract the top players from
South America and Asia.
Szymanski examines if Asian leagues have the potential to compete with the dominant leagues in Europe. His answer is that the Asian leagues would have not only to
retain the best Asian talent, but also attract a significant share of global talent, in order to
do so. The growth of the Asian economies has meant that several countries, especially
those with larger populations, have the potential to generate revenues from a highquality league comparable with those of Europe, so it is by no means impossible.
However, matching the European leagues in football would require substantial
investment. Asian leagues and clubs would have to invest in bringing top players to Asia.
While this is possible, it is hard to envisage the circumstances under which this would
generate an economic return. Investment in top-quality players would increase the
attractiveness of Asian leagues to fans, and so increase revenues from attendance, broadcasting, merchandising, and sponsorship, but not to an extent that would enable recovery of the initial outlay.
Szymanski concludes that it is possible that wealthy Asians might in the future choose
to sink the necessary costs to create a competitive Asian league for reasons of prestige
rather than profit. Most probably the impetus will come from China as its economy continues to grow. This might in turn trigger a response from other wealthy East Asian
economies, such as Japan and South Korea. While this does not appear likely in the short
term, as the economic power of Asia grows it is a fair bet that it will happen one day.
Tadashi Yagi (2016) provides an analysis of the successful development of the Japan
Professional Football League (J-League). According to Yagi, the most important reason
for the success was the introduction of a new concept or a package-type innovation that
was characterized by a home town system, an extremely long-term vision, a supporter
system, and positive relationships with lower level teams. Another important factor was
the strategy of cultivating simultaneous interest in national team/international competition and club/league competition. Unlike the Japan Professional Baseball League, which
is focused on domestic competition, the J-League is geared toward not only domestic
competition, but also competition at the international level. Recognizing the competition between and among different professional sports for fans, as seen by a shift of fans
from baseball to football, Yagi wonders if an increase in the variety of professional sports
raises the overall interest in professional sports, expanding the professional sports market
as a whole.
Jae Nahm (2016) conducts an analysis of the challenges that the Korean soccer league
(K league) faces, and this can be considered as a case study in support of Szymanskis
analysis. According to Nahm, each soccer team faces two markets, the players talent
market and the audience or fan market, and the performances of these two markets are
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closely related. If a club succeeds in buying blue chip players, it would succeed in generating revenues and profits by successfully winning in the fan market. Large profits in
turn enable the club to acquire talented players, creating a virtuous circle. Nahm argues
that the K league confronts domestic and foreign challenges at the same time, in both
acquiring talented players and attracting audiences. In acquiring talented players, the K
league faces challenges from overseas leagues since many outstanding Korean soccer
players are playing in foreign countries, partly as a result of salary gaps between the K
league and European leagues. In the fan market, the domestic challenge is the baseball
league that has successfully attracted large audiences, while the foreign challenge is
foreign leagues that have successfully lured the Korean fans partly because of the presence of Korean soccer players playing for the foreign teams.
In the floor discussion, Eiji Yamamura stated that international mobility of soccer
players and managers has contributed to the transfer of soccer skills from foreign countries to Japan, and has played an important role in upgrading the skills and strategies of
players and managers in the J-League. Japanese players bring back the skills and strategies they acquired by playing in Europe. These skills and strategies in turn are diffused to
local soccer teams. The inflow of foreign soccer players and managers into the J-League
has also resulted in the transfer of skills to Japanese players and managers.
Young Hoon Lee pointed out a peculiar characteristic of joint production in the
sports industry in that output is produced jointly with another team. Two rival teams
have to meet, and when they can work together they can produce output. As such, the
competitive level between these different teams is very important. Recognizing this interesting nature of sports economics, the chronic dominance by a few teams in the European football leagues may be unusual and such a situation may not be found in other
sports. Yosuke Yasuda argued that the absence of a salary cap is a factor explaining the
dominance of a few teams in the European football leagues. He referred to the case of the
Major League Baseball (MLB), where a salary cap is imposed and the ranking is diversified. On the chronic dominance of a few teams in the European football leagues, Shujiro
Urata wondered if the introduction of the drafting system may ameliorate the situation if
the dominance is considered as a problem. Hal Hill asked why the Premier League performs exceptionally well in terms of the market value of squads. He also asked if there
are any roles that the government can play in promoting the soccer league.
Yukinobu Kitamura provided some useful information on the business strategy
adopted by the J-League in the early stage of its development. According to Kitamura, the
J-League has adopted the German style of sports club tradition and the English style of
locally based sports club tradition. Before the J-League, there was an amateur football
league based on companies, and then J-League wanted to change from a company-based
to locality-based league. Kitamura argued that this indicates that the J-League is very
keen to learn lessons from the successful experiences of other countries.
In response to the question about special characteristics of the successful Premier
League, Szymanski asserted that the Premier League is nothing special. The reason for its
success is that successful managers purchase good players, just like successful fund managers pick good stocks in the stock market. Szymanski dismissed cultural elements in
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explaining different performances between the Premier League and the Asian leagues,
such as the J-League and K league. Having noted that nothing is special about the
Premier League, Szymanski stressed the presence of some people or sponsors who are
willing to sink several billions of dollars into buying the best players and buy success in
Europe and particularly in the Premier League. Responding to Hoons comment that
sports is a joint product between the teams and thus reasonable balance in the teams
competitiveness may be needed to have interesting games for winning fans support,
Szymanski argued that such an explanation proposed by the economics of sports literature does not apply to the soccer leagues. As was discussed in the paper, chronic imbalance between the teams or dominance by a few teams has been the typical pattern in the
soccer leagues not only in Europe but also in other regions including Asia. Szymanski
reiterated the validity of the Sutton model in explaining the chronic dominance by a few
teams. Szymanski also stressed the adoption of the promotion and relegation system in
the football league as a factor leading to chronic imbalance. In such a system, the worst
performing teams at the end of each season get sent down to play at a lower level automatically, purely on sporting merit, and are replaced by the best performing teams. This
is completely different from the closed system, where the same teams stay in the league
every season. The closed system is adopted by the MLB and the national basketball
league in the USA. Fierce competition among the teams in the soccer leagues due to the
promotion and delegation system precludes the leagues from adopting measures such as
a salary cap and revenue sharing, which may improve the balance between the teams.
Szymanski emphasized that although some may argue that parity is desirable, no one
wants to see the abolition of the promotion and relegation system in soccer.
2.2 Miyoshi and Sasaki on the economic impact of the 1998 Nagano Winter
Olympic Games
Fierce rivalry between cities to hold a mega-sports event like the Olympic Games is often
observed suggesting that there may be large benefits to the host city of holding such an
event. Koyo Miyoshi and Masaru Sasaki (2016) provide some evidence of these benefits
and where they arise in their assessment of the long-term effects of the 1998 Nagano
Winter Olympic Games on area-specific gross domestic product (GDP) and labormarket outcomes in Nagano Prefecture, including Nagano City and its neighboring
towns and villages.
One of the notable features of any Olympics Games is the associated increase in
infrastructure expenditure. In the case of the Nagano Olympic Games, a Shinkansen
bullet train line and freeway were extended to Nagano, and various venues for Olympic
events were constructed. These public works provide huge benefits to the construction
industry in the short term, but also help the host city attract tourists to the host city, and
the venues may be used for other purposes afterwards. It is also possible that the facilities
and venues are actually wasteful and are not utilized or underutilized after the event, but
the local government still incurs the cost of their maintenance.
The key problem in determining the long-run economic effect of holding a megasports event is to determine what would have happened if the event had not been held.
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Of course this outcome cannot be observed. In order to assess these long-term effects,
Miyoshi and Sasaki use the synthetic control methodology developed by Abadie et al.
(2010), with Nagano Prefecture being treated as the treatment economy, and the rest of
Japan is assumed to be unaffected by the Olympic Games. Crudely speaking, this methodology requires building a synthetic economy that behaves similarly to the treatment
economy, Nagano, before the event, but is not subject to the treatment of holding the
sports event. Differences in the performance of the synthetic economy and the actual
treated economy after the event indicate some of the impacts of the sports event.
Miyoshi and Sasaki find evidence of a long-term positive impact of the Nagano
Olympic Games on the Nagano prefectural economy when they examine total GDP and
population, but not in terms of GDP per capita. A significant impact on production in
the construction sector is observed in the short run, but not in the long run. In contrast,
positive long-term effects are observed in the real estate and service sectors, even though
land prices in Nagano Prefecture were not affected.
In order to examine the effect of the Olympics on local labor markets, Miyoshi and
Sasaki examine three variables, the jobs-to-applicants ratio, the applicant ratio, and the
vacancy ratio. It is found that in each case, the counterfactual ratio moves closely with the
actual ratio, which implies that the difference between these two ratios is very small over
the sample period. Miyoshi and Sasaki conclude that the actual labor market ratios are the
same as what they would have been if Nagano City had not hosted the Olympic Games.
For the analysis based on macroeconomic variables, Chalongphob Sussangkarn
(2016) queries the choice of Nagano Prefecture as the treatment area, and suggests that
because of the infrastructure that was built for the Olympics, Gunma Prefecture could
also be considered as a treatment area. He also wonders whether the labor market analysis is totally appropriate, suggesting that it is possible that the labor market ratios analyzed could remain stable even if the total number of applicants or jobs changed
significantly. Since the population of Nagano is found to have increased, he suggests that
it is likely that total employment changed too.
While Miyoshi and Sasakis analysis indicates that the Olympics had a positive
impact on Nagano, Hiroaki Miyamoto (2016) wants to know about the numerical size of
the impact. Given Miyoshi and Sasakis finding that the population of Nagano increased
as a result of the Olympics, Miyamoto wants to know what the economic story is to
explain these results. Miyamoto makes a final point about the potential for sample selection bias in the data used by Miyoshi and Sasaki in their analysis of labor markets,
namely that the dataset does not include unregistered job seeker and firms that do not
register their vacancies. When the primary method of job search for the majority of
unemployed workers is not visiting/registering at employment service offices, it is hard
to know whether using data based on registered job seekers will lead to an overstatement
or an understatement of the impact.
A number of participants suggested that Miyoshi and Sasaki needed to spell out
more carefully the economic story for why a long-run economic impact of a mega-event
is expected. Is it because it raises the brand name of Nagano as suggested by Colin
McKenzie or Japan as was suggested by Marcus Noland, and this raises tourism in Japan?
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Is it because of the connectivity channel associated with building new bullet trains
and/or freeways (McKenzie and Sussangkarn)? Is it because wasteful sporting facilities
are built and not used afterwards, so there is no long-term effect (or a negative effect as a
result of taxes) expected?
Following on Sussangkarns comments, a number of participants suggested that
regions in addition to Nagano could have been affected by the Nagano Olympics. Yagi
argued that some companies with headquarters in Tokyo, for example, Dentsu, would
benefit because of their managerial skills. Noland went as far as arguing that the whole of
Japan should be treated as the treatment group.
In his response, Sasaki suggested that the reasons for a short-term impact of the
Olympics, people visit the city and spend money, and the city builds venues and has to
pay for them were rather obvious, but agreed that there was a need to spell out in the
paper the reasons for long-term impacts. While acknowledging that not everyone who
was looking for a job registered at the employment service office, Sasaki argued that
because the job-applicants-ratio was from administrative data there was no geographical
bias in the data and it was also a complete survey.
2.3 Noland and Stahler on Asian participation and performance at the
Olympic Games
Marcus Noland and Kevin Stahler (2016) examine how exceptional the performance of
the Asian region and Asian countries has been at Summer Olympic Games held over the
period from 1960 until 2012. It is assumed that an individuals country share of total
medals won out of all the medals available can be explained by variables including population, per capita GDP, the level of schooling, and whether the country was the current or
previous host. An analysis using this model is applied to the share of all medals, the share
of female medals, individual sports, and the share of medals in all weight class-based
sports.
From their analysis of all medals, Noland and Stahlers key findings are that the
Northeast Asian countries, China, Japan, and South Korea, conform to the global statistical norm, while the rest of Asia lags. That is, the countries in the rest of Asia underperform compared with what their model predicts. In terms of medal performance, Asian
women are found to perform better than men. Asian women do not underperform (and
do not overperform) compared with the global norm. As a result, Noland and Stahler
argue that non-Northeast Asias under-performance in aggregate relative to the global
norm is due to the underperformance of their men, not their women. When the medal
pool is restricted to only weight class-based sports, there is some evidence that Asian athletes achieve relatively more success.
When the performances in individual sports are analyzed, other Asian countries do
significantly better than the global norm in badminton and table tennis, while Northeast
Asian countries do significantly better in archery, badminton, judo, and table tennis.
These are sports where Noland and Stahler argue these countries have a cultural connection. There are also many sports, like rowing, sailing, and tennis, where both groups of
Asian countries significantly underperform compared with the global norm.
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Using their models for the share of medals each country wins, Noland and Stahler
forecast the performance of each Asian country at the Rio Summer Olympics in 2016.
They predict that compared with their actual performance at the London Summer
Olympics in 2012, South Korea will win an additional four medals, Japan three, and
China two. That is, Northeast Asia will improve its performance at the Olympics.
Yukinobu Kitamura (2016) questions one of Noland and Stahlers key assumptions,
namely that the production function for producing Olympic caliber athletes is basically
the same across countries. He argues that athletic talent is not distributed evenly across
countries. He also argues that sociocultural differences across countries mean that the
production technology for producing high-caliber athletes is not the same across countries. By drawing on the industrial organization literature, Kitamura hypothesizes that
one countrys efforts to obtain medals will depend on the efforts of other countries, so
that Noland and Stahler need to take account of the competition among countries in
their analysis.
Yosuke Yasuda (2016) wants to know about the reasons or story underlying some of
the results that Noland and Stahler found and whether there is an effective policy to alter
those outcomes. Why is it that male athletes from non-Northeast Asian countries underperform and can anything be done about it? Yasuda also wonders why Noland and
Stahlers in-sample predictions for Japans performance at the London Olympics are so
poor, and whether they reflect estimation fragility.
A number of conference participants raised questions about policy-related issues.
Jong-Wha Lee and McKenzie asked whether government financial incentives affect the
number of medal recipients. Hill, McKenzie, and Yagi asked whether government assistance to sports in general matters for the countrys performance at the Olympics. Urata
wondered whether rules for the naturalization of foreigners could be used to improve the
quality of home athletes.
Jong-Wha Lee queried whether the better performance by Asian female athletes was
the result of discrimination in the labor market that provided a strong incentive to go
into sports competition. If this was the case, it would be quite a different story to the one
discussed in Kotschwar and Stahler (2016).
While acknowledging that centers of excellence in sports (and other areas) in certain
geographic locales are observed and that they can disappear or shift elsewhere, Noland
suggested they may have to do with demonstration effects. Noland said that he was
unaware of any systematic research on the role of financial incentives to individual competitors who win medals. On the issue of government targeting, he suggested that
because the depth of competition is greater in male events, policy interventions are likely
to have a bigger pay-off in female events, and argued that was what East Germany had
done in the past. Noland acknowledged that training systems can be very important and
cited the case of East Germany. He suggested that naturalization is probably unimportant except for the Gulf countries.
On the question of whether discrimination in the labor market led to women
to migrate to sports, Noland suspected a different mechanism was at work. The reason
why South-East Asian women do well relatively compared with South-East Asian men
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is that in the competition, which have is a cultural connection like badminton, the
extra-regional competition for women is weak compared with male extra-regional
competition.
2.4 Jang and Lee on the economics of Asian professional baseball leagues
Hayley Jang and Young Hoon Lee (2016) examine comparative data on the Nippon Professional Baseball League (NPB), the Korean Baseball Organization (KBO), and American MLB to derive policy lessons for the Asian leagues.
The most striking difference between MLB on the one hand and NPB and KBO on
the other is that nearly all teams in the Asian leagues are affiliated with conglomerates,
whereas few MLB teams have corporate owners. This arrangement fundamentally affects
the teams utility functions: rather than being independent profit-maximizing entities,
most Asian squads can be regarded as contributing to the profit maximization of their
parent company. In fact, on a strict accounting basis, most of these teams lose money
and require subsidization from the parent, and can be viewed in significant part as promotional ventures for the parent firm. (It is noticeable that NPB and KBO teams are
known according to their parents (the Yomiuri Giants, for example), while MLB teams
are identified by their host cities (e.g. the Washington Nationals). One consequence of
this arrangement is that the budgets of the Asian teams tend to show greater variability
over the business cycle, and can reflect the economic fortunes of their parent. There is
evidence, however, of some convergence toward the MLB model where profitability plays
a greater role in the teams utility functions.
For all three leagues to survive there has to be some minimum level of competitive
balance (CB), although the optimal level of CB has been disputed in the professional
literature. In the case of MLB, where there are considerable differences in geographic
market size, revenue (and hence payroll) disparities could threaten CB. Compensatory
mechanisms, such as a draft for young players and partial sharing of television broadcast revenues, have been introduced to encourage CB. Similar revenue disparities exist
in the Asian leagues, but these are not reflected in payrolls due to subsidies from the
parent firm. Jang and Lee conclude that as parents reduce subsidies, compensatory
mechanisms similar to those operating in MLB may need to be introduced to preserve
CB in Japan and Korea.
A final issue is fan loyalty, which appears to be lower for KBO teams than for MLB
teams. In the case of Korea, participation in international competition has stimulated fan
interest, and Jang and Lee argue that from this perspective it would be desirable to get
baseball restored to the Summer Olympic Games, and to introduce international competition among professional clubs perhaps on the model of the Union of European Football Associations (UEFA) Champions League competition in football (soccer). The latter
could be undertaken initially at the level of Northeast Asia and perhaps expand outward
to incorporate professional teams from other regions.
Takanobu Nakajima (2016) raises a note of skepticism, however, with regard to
the ability of NPB to address its incipient challenges. First, the commissioner of NPB is
weak compared with his MLB counterpart, making it more difficult to address collective
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action problems. Specifically, two of the dominant Central League teams (the Yomiuri
Giants and the Chunichi Dragons) are owned by traditional media firms that have been
resistant to the use of new digital and social media platforms, which could be used to
stimulate fan interest and loyalty. Second, as a matter of policy choice, NPB is largely
dependent on the development of Japanese players. The links between youth baseball
organizations and NPB are weak, but there is some reason to believe that tighter connections are beginning to develop. This issue is particularly salient insofar as Japan is a
rapidly aging society and Japanese youth have an ever-widening array of sports in which
they can participate. In short, NPB faces a prospective shortage of young, high-quality
Japanese players. Waning fan and youth interest underscore the need for strong leadership to confront NPBs collective action challenges.
Eiji Yamamura (2016) largely addresses issues not covered Jang and Lee (2016).
Yamamura raises the possibility that identity fractionalization or fragmentation may
detract from team cohesion and adversely affect performance. Specifically he makes this
argument with respect to the KBO, which has at times pursued a territorial draft system
in which young players were selected from each teams immediate region. One concern is
that such a system might adversely affect CB. Yet at the same time it might contribute to
greater fan interest and loyalty. But if one were interested in examining the basic supposition that heterogeneity of identity adversely affects team performance, the natural laboratory would be MLB or European professional football (soccer) which draw players
from a global pool, and have witnessed considerable change over time in the ethnic
makeup of their rosters.
In the floor discussion, Noland argued that a fundamental difference between MLB
on the one hand and the Asian leagues on the other risked getting lost: namely, that MLB
by definition had the highest quality of competition because MLB teams were free to
recruit players from all over the world, whereas as the foreign player quota-constrained
NPB and KBO were operating a fundamentally different model in which teams fight over
rents defined by a domestic market, where a critical component of the league was the linguistic, cultural (and possibly time-zone) distance of the local fan base from the rest of
the world. Szymanski echoed this point, arguing that if one broadens the lens beyond
baseball, the American model of free-standing, profit-maximizing teams recruiting
players from all over the world such as also exists in basketball and hockey is unusual,
and that NPB and KBO are closer to the global norm.
The possible links between local players, fan interest, and fan loyalty were a prime
topic of the floor discussion. On one side of the debate, Noland and Szymanski argued
that opening rosters to players from all over the world had led to improved quality of
play and heightened fan interest in MLB and English Premier League football (soccer),
and that closure to foreign players as occurred for a time in the Italian league led to
falling attendance. On the other side, Urata asserted that in NPB, opening rosters to
players from anywhere in the world would reduce attendance, and hence would not be
an advisable business move. Young Hoon Lee argued that an influx of foreign players
might also adversely affect local baseball culture by discouraging young local players who
might assess their ability to play professionally more skeptically.
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2.5 Kotschwar and Stahler on sports and Asian womens labor force advancement
Barbara Kotschwar and Kevin Stahler (2016) propose the promotion of womens sport
participation at early ages as a tool for increasing womens labor participation later in
their lives. Many countries in Asia, including Japan, are grappling with the issue of how
to bring more women into the labor force in order to boost economic growth in the face
of challenging demographic headwinds. Hence, Kotschwar and Stahler argue promoting
sports participation is a valuable policy tool.
Kotschwar and Stahler argue that women who participate in sports in high school
tend to become healthier and more motivated to attain higher education. Women also
gain the ability to decide through sports. Women who have participated in sports tend to
have higher labor participation rates and later join the executive ranks.
An international comparison shows that women in Asia lag women in other regions
in terms of their labor force participation and membership in corporate leadership
bodies. This is particularly acute in East Asia, and not so much in South-East Asia. While
women make up much less than their share of the labor force or of tertiary degree recipients across the board, the Asian region shows an even greater gender imbalance in corporate leadership ranks. East Asia places last in both female representation in executive
ranks as well as females on executive boards. In contrast, South-East Asia ranks among
the greater gender-balanced executive ranks in the world, with females making up a
quarter of executives and 13% of board members. On average, women represent only
5.4% of East Asian executives and 5.9% of board members. Out of 4000 East Asian firms,
only 109 have female chief executive officers and 59 have female board chairs. This marks
a clear disconnect between female education and labor force results and the advancement to senior positions. This finding is perplexing given that East Asian women are
comparatively well educated and possess knowledge capacities similar to their male
cohort.
Kotschwar and Stahler argue that participation in sport has measurable positive
effects on other aspects of life, including academic achievement, and on the enhancement of labor force participation and leadership through a number of direct or indirect causal channels. A growing body of literature links female involvement in sports
to desirable outcomes in sexual health and disease prevention, social development, educational achievement, overall labor force participation, corporate management, and
leadership. Participation in high school sports is associated with positive effects on
girls achievements in science, a field traditionally dominated by males. Sports connection to female development also extends beyond school and into later professional
success. Sports provide girls with directly transferable skills often seen as essential for
management: the ability to be a team player, to compete, and to win and lose with
grace.
Kotschwar and Stahler propose a number of sports program-related policies for
Asian countries to consider in order to better integrate women into education, society,
labor, and corporate boardrooms. These include expanding girls opportunity to play
sports inside and outside of school; using government legislation to enhance womens
access to sport and physical activity; using frameworks designed by multilateral bodies to
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anchor policy reforms; expanding non-governmental sports programs promoting gender

equality as engine of social change; promoting the achievements of Asian female Olympians and other elite women athletes in campaigns connecting achievement in sports to
achievement in professional life.; and encouraging the funding of research projects that
evaluate the country-specific effect of sports on educational/professional outcomes.
The designated discussants of this paper and the floor participants all agree on the
thesis that it is a desirable policy to rectify the low women labor participation and executive rank achievement in Japan and East Asia. However, they differ on the importance
and contribution of sports to achieving this goal.
Siow Yue Chia (2016) agrees with the thesis that Asian women need to participate
more in the labor market. While Kotschwar and Stahler recognize that promoting sports
participation is only one way of achieving gender equality, Chia questions whether promoting sports is the best way to achieve more equality in the labor market and boardroom. Chia wishes for more robust evidence for Asia to support Kotschwar and Stahlers
argument that sports provide girls with the positive attributes better than alternative
activities.
Yukiko Abe (2016) thinks that the evidence relating sports and higher labor participation and corporate achievement is weak especially for women. She also points out that
many factors, other than sport, influence the labor market participation of women. Abe
thinks sports may not be a major factor. She cites the conventional wisdom in Japan that
continuing work after childbirth has been the most challenging to womens career development. Abe is rather skeptical about the contribution that sport can make to womens
career development in Japan and Asia. Abe wonders whether Kotschwar and Stahler
assume boys participate in sport adequately, too little, or even too much.
Abe seeks an explanation of the theoretical justification, possibly market failure for
the policy recommendations. She lists (i) liquidity constraints, (ii) gender discrimination, or (iii) social norms as possible reasons. These theoretical points can be discussed,
but they may not solve the question of whether sports enhance labor market participation and success. Abe thinks that Kotschwar and Stahler should be clear on where they
think the market failures lie.
Many conference participants thought women at least Japanese women participate in the labor market well until the time they give birth and start raising children. The
gender gap widens afterwards, and it is hard to catch up. Does sports participation solve
this problem? The answer is probably not.
Miyamoto pointed out that it is necessary to control for other factors in making a
causal connection from sports to labor participation rate. Sasaki raised the possibility of
reverse causality, namely that smart girls finish their homework quickly and then have
time to do athletics.
Sussangkarn argued that in Thailand and other developing countries, there are no
organized sports in education, either for girls or boys. He agreed that organized sports in
school are important. Nakajima pointed out the importance of sports among handicapped people. Szymanski pointed out that physical balance is important, and that
physical activities are good from that viewpoint.
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2.6 Cha on the role of sport in international relations

Victor Cha (2016) addresses the role of sport in international relations, specifically
focusing on the issue of sport and national identity with special reference to the case of
Japan. To be clear, sport is not one of the dominant drivers of diplomacy. However, Cha
argues that sport has been used as a crucial building block for national identity and
nation-building. Examples include the fielding of common or united teams by divided
countries such as Germany, Yemen, and Korea. In these cases, negotiations over putting
forward a common team forms a point of aspirational focus regarding unification, which
eventually occurred in two of the three cited cases.
Second, sport has been a vehicle to assert national identity and in some cases independence. An example would be the case of Ireland, where traditionally Irish sports and
the fielding of Irish teams were linked to the movement to secure political independence
from Great Britain. In the case of Japan, the form and even language of baseball was used
as a tool to construct particular notions of national identity.
Third, sport can be a generator of soft power, or the ability to influence the attitudes
of foreigners through appeal and persuasion rather than coercion or money. Success in
sport can increase awareness of a country with regard to foreign audiences and can contribute to positive impressions of that nation. Cha offers the example of Australia, whose
relative prominence in world sport has contributed to awareness of and positive feelings
toward that country.
Finally, the hosting of mega-events can be both a mechanism of domestic renewal as
well as a means to establish that a country has arrived as a significant power on the
world stage. Infamously, this function manifested itself at the 1936 Berlin Olympics, but
was used more constructively at the 1964 Tokyo Olympics and the 1988 Seoul Olympics,
with the 2008 Beijing Olympics possibly representing an intermediate case. Looking
forward, Asia will be hosting Olympic Games in 2018, 2020, and 2022, and it remains to
be seen how the host countries will use these opportunities for both domestic renewal
and the projection of soft power.
Hal Hill (2016) accepts Chas four arguments (and indeed provides an additional
example of the use of sport for nation-building: South African leader Nelson Mandelas
extraordinarily conciliatory embrace in the immediate post-Apartheid era of the Springboks, the countrys rugby team, strongly associated with South Africas Apartheidsupporting the Afrikaaner community). Hill raises a skeptical note about how central or
enduring the impact of sport is on international relations, arguing that characteristics
such as high governance standards, economic and technological development, and the
provision of international public goods have a greater impact on how a country is
regarded by global audiences than its performance in sport competitions.
Like Hill, Akihiko Tanaka (2016) accepts that sports have a role to play in international relations, but adds additional qualifications to the case as well. First, for sport to
have an impact on politics, a sport has to be popular. For a sport to have an impact on
international relations or soft power, it probably has to be internationally popular.
Perhaps the best marker of sports soft power is when a locally popular sport becomes
popular internationally. Second, one can conceptually differentiate the impact of a
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countrys performance on the field and a countrys performance in hosting a sports

mega-event, with the latter likely to have the larger impact. But even in this case, Tanaka,
like Hill, suspects that economic development, participation in the provision of international public goods, etc. have a more enduring impact on foreign attitudes toward a
country than does that countrys ability to successfully host a sports mega-event. Indeed,
Tanaka wonders if the causality actually runs in the other direction: successfully
managed countries are highly regarded and hence chosen to host events; that is to say,
the selection of a country to host an event is a ratification of international approval, not
a means of achieving it.
During the floor discussion, Szymanski raised two important points. The first was
the intimate connection between the development of sport in the 19th and 20th centuries, illustrated by such things as the origins of gymnastics, and militarism. Sport was
seen as a mechanism to improve physical fitness among young men and hence their
military prowess. The link between sports and military power is fading largely due to
developments in military technology, but sport, particularly as demonstrated by
national teams in international competitions, is still regarded as a kind of proxy for
national vitality.
The second issue was that in many prominent sports such as baseball, football
(soccer), American football, basketball, and tennis, there is a tension between the owners
and/or organizers of the league or tour, and the national sports authority. Where significant sums of money are involved, stakeholders tend to resist the desire of national sports
authorities to involve athletes in international competitions such as the Olympics, which
could disrupt their normal schedules of competition and/or expose them to greater risk
of injury (and thereby reduce their economic value in future competitions). So the relation between sport and national authorities can be a contested one.
Cha responded by accepting the qualifications of Hill and Tanaka that sport must be
viewed as part of a broader fabric of international relations, but argued that sport can
play a role in focusing and amplifying a countrys accomplishments. Even if these
impressions are transitory for foreigners, he argues that the impact on a countrys own
internal narrative of its historical trajectory can be much more lasting.
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