7 ways to explain ‘foreign direct investment’ with football

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This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Matthew Stephenson, Head, Investment Policy and Practice, World Economic Forum

  • As the 2022 World Cup nears its grand finale, here are some insights as to the similarities between football and foreign direct investment.
  • Firms and footballers alike use foreign markets to improve their performance and chance of success – both for talent and management.
  • The surprising number of commonalities also include ensuring a fair and predictable playing field and improving competitiveness.

As the 2022 World Cup nears its grand finale, I was watching a game one night while working and I realised how football and foreign direct investment (FDI) share some remarkable similarities.

Here are seven ways that may inspire investment actors – authorities, firms and societies – to learn from football actors – owners, coaches, players – or vice versa.

1. Enter foreign markets to develop skills or find top talent

Both firms and footballers use foreign markets to improve their performance. Take the case of Lionel Messi, considered the best player in the world with seven Ballons d’Or to his name – the most any player has ever received.

Messi, from Argentina, relocated to Spain as a 13-year-old to develop his talent with the famed Barcelona football academy before graduating to make his senior debut aged just 17.

He has since become Barcelona’s all-time top scorer and taken these skills to his national team Argentina, which will be looking for World Cup glory on Sunday.

In 2021 Messi moved from Barcelona to play for Paris St-Germain – the current Ligue 1 champions. Of PSG’s current team, only 35% of players are French, demonstrating how one sometimes needs to cross borders to find top talent.

These examples – repeated across players and countries – are classic illustrations of strategic-asset seeking FDI, which aims to enter foreign markets to acquire knowledge or talent not found at home.

2. Enter foreign markets to acquire management or executive experience

As with players, both firms and football teams alike often seek top managerial talent abroad. Over Barcelona’s 120-year history, more than half (38 out of 70) of their head coaches were foreigners.

Executive talent knows no borders and there are strong examples of foreign management prowess in the business world as well: Elon Musk (Tesla, SpaceX) is originally from South Africa, while Sundar Pichai (Alphabet) and Satya Nadella (Microsoft) are both originally from India.

3. Enter foreign markets to benefit from resources not found at home

Both firms and football clubs use foreign markets to access natural resources when required.

Tenerife in Spain, for example, enjoys 340 sunny days a year and has become a favourite for warm-weather training camps – with one site having welcomed more than 250 football teams.

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A lot of these teams come from England, but also the Czech Republic, Germany, Switzerland and Sweden.

Meanwhile, Mexico has become a top destination for football teams that want to train at altitude to help players improve their fitness.

The same phenomenon happens with investment, whereby firms undertake resource-seeking FDI, which aims to enter foreign markets to access natural resources not found at home.

4. Enter foreign markets to increase competitiveness

Football teams that qualify to play abroad benefit from more challenging competition, particularly compared to their domestic rivals who aren’t able to venture across borders.

The same applies to investment: governments that limit inward and outward foreign direct investment put their firms at a competitive disadvantage, since the contestability they face is lessened.

In the FDI literature, this is known as a ‘competition effect’ that forces firms to either make it on the international stage or go out of business.

5. Create stronger organizations through building conglomerates

Firms and footballers demonstrate a growing trend of multi-business or multi-club ownership. Multi-business ownership takes place through mergers and acquisitions (M&A). In 2021, global M&A was the highest on record, reaching $5.9 trillion – a year-on-year increase of almost two thirds.

Foreign owners of football clubs have likewise been investing in several clubs at once. For instance, the Abu Dhabi-owned City Football Group 12 clubs across every continent except Africa over its 10 years of existence, having started with current English Premier League champions Manchester City.

Meanwhile, Eagle Football Holdings, a US-base entity, bought stakes in top league clubs in Belgium, Brazil, England and France in the space of just a year.

In both cross-border M&A and football, it seems capital owners see the opportunity for synergies by building conglomerates though holding multiple organizations.

6. Ensure a pipeline of talent that receives the right training

Firms and footballers both know that talent is essential for success, and both adopt relatively similar techniques to ensure a talent pipeline for their organizations.


Most professional football clubs have academies and youth divisions to help develop young players. As mentioned, Messi started at Barcelona’s academy before debuting for the senior team at the young age of 17.

Similarly, firms work closely with educational institutions to try and ensure that vocational education imparts the skills they will need in future workers.

For instance in Switzerland, where two thirds of young people benefit from vocational education, the authorities “work closely with… professional organizations to coordinate vocational education and training”.

7. Create a fair and predictable playing field that avoids escalation

In both business and football, there are key actors to ensure that the system works fairly, namely judges and referees. The laws of the game must be applied consistently to create predictability.

In football, referees use a range of tools including warning, yellow and red cards and powers to award free kicks and penalties in order to stop bad behaviour on the pitch.


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Investment environments can use relatively similar systems, including early warning mechanisms to address disputes before they become legal grievances in court.

The World Bank Group has also found regulatory predictability as the second most important determinant for foreign direct investment, behind only political stability.

Football and investment share a surprising number of commonalities.

However, perhaps investors and footballers have already realized this, as foreign direct investment in football teams continues to grow as global investors seek to benefit on the football boom.

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