The role of diversity in determining team efficiency: an empirical sports team analysis

Analysing team efficiency is of particular interest to franchise managers and sports enthusiasts. This study collects data from the regular season of 2004–2005 through the 2021–2022 season of the National Basketball Association (NBA), encompassing a total of 18 seasons and 30 teams. By utilising a stochastic production frontier model, this paper aims to explore the intricate relationships between team composition, diversity and productivity efficiency. The empirical findings reveal that nationality and key physical attributes (heights in basketball) diversities within teams are positively associated with higher team productivity efficiency. Conversely, age and usage diversities do not demonstrate a significant correlation with enhanced efficiency. This study suggests that players with varied skill sets from diverse cultural backgrounds can collaboratively enhance team success and exert a positive influence on team performance and efficiency. Team members sharing similar age brackets may experience positive effects on team efficiency and bolster team cohesion. Furthermore, star players can significantly influence the team’s productivity efficiency. These findings carry noteworthy implications for organisations aiming to leverage diversity as a catalyst for enhanced team productivity efficiency. Overall, this research provides valuable insights and highlights the importance of diverse team composition and strategic management decisions in a highly competitive and dynamic sporting environment. We believe that central insights leveraged from sports team analysis can further advance management research and test managerially relevant phenomena.