Does replacing a manager improve performance?

This paper investigates whether replacing a coach improves teams performance. We do so by using match-level team performance data and a propensity score matching triple difference estimator. As a control group we use the matches of teams that did not fire the coach but that share similar observable characteristics and an identical pre-firing performance history with those whose coach was fired. On average, teams perform better with the new coach: they win more games, score more goals and concede fewer. However, all these positive effects disappear when one compares the improvement in performance of those teams whose coach was fired with the corresponding “improvement” achieved by control teams that have a similar probability of firing the coach but have not done so. Our results do suggest that firing is likely to be an instrument used to provide incentives. Soccer teams may use it more often than firms simply because the outcome is easily observed. ∗I acknowledge Randolph Sloof, Geert Ridder, Bas van der Klaauw, Pieter Gautier, Edwin Leuven, and Rudd Konning for their valuable comments. I am specially grateful to Rudd Konning for providing part of the data.