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  • Thumbnail for What determines the transfer fee of a soccer player?
    What determines the transfer fee of a soccer player? by Chin, Sayorn

    This paper examines the theoretical framework of the TP-CP model that establishes the relationship between a soccer player’s performance and his market value. An OLS estimation is used to investigate the characteristics that determine the transfer fee of a soccer player, and buying and selling behavior of soccer clubs during the transfer negotiation. The characteristics are divided into three categories: The characteristics of players, buying club, and selling club. Using cross-sectional data of 447 transfers in the English Premier League (EPL), including summer and winter transfer periods from July 2013 to May 2016, the results indicate that the characteristics tests explain a large part of the transfer fee of a player. In addition, the characteristics of players such as the average goals scored per game played increase the transfer fee of a player significantly. In fact, for every goal scored by a player, the transfer fee increases by approximately €9,112,000. This paper also deduces that the behavior of buying and selling clubs is largely methodical.