When does managerial experience matter? Evidence from Major League Baseball

In the world of professional sports, a manager’s ability to influence team success is often questioned. This study exploits a unique feature of Major League Baseball (MLB), which has different rules of play depending on what league a team is in, to examine whether managerial impact is driven by the level of responsibility they are given over in-game decision making. Using 47 seasons of MLB data, we find evidence that the development of human capital in the form of on-the-job experience and exposure to prior success is only beneficial when managers are employed in more complex decision-making environments. The results of this study have ramifications on the hiring decisions, both in terms of personnel choice and remuneration, of professional sports organizations.