Date of Award

2017

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Qi Ge

Abstract

Using game-level panel data on the National Basketball Association for 2015-2016 season, I examine the relationship between trade and team performance. In my study, trade is measured by a game-minute-adjusted salary dispersion. I construct a fixed effect model to analyze the effect of salary dispersion on team performance. The results show that salary dispersion is negatively related to team performance. To verify whether different team characteristics will affect this relationship, I categorize the teams into two groups twice based on their playoff likelihood and number of trades made. The results provide additional evidence that salary dispersion influence team performance negatively. The findings suggest that a compressed salary structures lead to more productivity in the NBA.

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