Cultural diversity and national culture: understanding wage dispersion in European football

Purpose/Rationale: This paper examines how national cultural values, cultural diversity, and league size shape team wage dispersion in European professional football clubs. While cultural diversity's influence on remuneration has been widely analysed in management studies, its effects within sport contexts remain comparatively underexplored.Design/Methodology/Approach: Using data from 4,730 players in 213 UEFA Champions League teams between 2009 and 2020, the study employs linear regression models with random effects, standard errors adjusted using the Moulton (1990) correction to account for the multilevel structure of the data, and the correlated random effects approach proposed by Mundlak (1978) to control for unobserved club-level heterogeneity. The analysis estimates how national culture (based on Hofstede's dimensions), team and owner nationality, and league size are associated with intra-team wage distribution.Findings: The results reveal that power distance and masculinity are positively associated with team wage dispersion. The strength of these associations varies with league size: the association with power distance weakens in the Big Five leagues, whereas that with masculinity intensifies. Neither the share of foreign players nor foreign ownership shows a significant direct or moderating association with wage dispersion.Practical Implications: Understanding how cultural and structural factors relate to team compensation structures can help club managers and owners anticipate internal wage hierarchies and design incentive schemes accordingly.Research Contribution: The study extends research on cultural determinants of wage inequality to the professional sports domain, identifying the conditions under which national culture matters most.Originality/Value: By integrating cultural, ownership, and structural variables, this research offers new insights into the complex drivers of compensation patterns in professional football.