What Enables Human Capital Investment Sharing in Elite Sport?

Abstract

Sport organizations increasingly cooperate to invest in elite athlete development, sometimes even across national boundaries and industry sectors. This study attempts to explain why organizations decide to cooperatively invest by extending human capital theory. A multiple case study of National Pro Fastpitch (NPF) and Kunlun Red Star Hockey Club (KRS) was conducted, including an analysis of 43 interviews and 305 documents. Organizations decided to invest cooperatively because they believed human capital sharing would allow for levels of investment that would otherwise be prohibitively expensive for individual organizations. Four enabling conditions explain when organizations perceive sharing as more effective than human capital “buying” or “making.” The findings extend human capital theory to explain sharing decisions. The cases and theory provide practical insights for managers investing in athlete development and expanding sports leagues.

1. Introduction

National sport organizations (NSOs) from Australia, Canada, China, Mexico and the United Kingdom have begun leveraging professional sport leagues to develop players for national teams. For example, NSOs in China hoped that clubs playing in the Russian Kontinental Hockey League (KHL) and now-defunct Canadian Women’s Hockey League (CWHL) would aid China’s hockey success in the 2022 Winter Olympics; on the other hand, professional leagues hoped that infusions of higher-level talent and additional revenues from investing countries would aid league quality, expansion, and sustainability [1,2]. Indeed, both investing countries and professional leagues had interests in developing and profiting from player talent. This arrangement reflects an interesting theoretical dynamic of human capital sharing wherein multiple entities share the costs of developing talent to meet various ends.

The notion of human capital sharing that we develop in this article is rooted in the classic concepts of human capital theory. Human capital is a critical component of economic growth and the primary source of organizational competitive advantage [3,4,5]. Conceptually, human capital explains a firm’s investment in human resources [6,7], whereby firms either “make” talent through training programs or “buy” talent by hiring highly skilled workers [8]. However, as our previous anecdotes suggest, it is also possible that organizations gain human capital through “sharing.” Sharing human capital entails investment in human resources [7]. Therefore, although it is well-known that many organizations can benefit from sharing the labor of a talented worker [8,9,10], human capital sharing refers to the less studied situation when organizations share in the development of talent.

Human capital sharing is theoretically interesting because it suggests that under-resourced organizations or nations might be able to invest in sustainable human development by sharing the costs and benefits of human capital investment. However, sharing also presents a theoretical conundrum: why do organizations share human capital investment with each other rather than do it alone (as predicted by human capital theory) and keeping the benefits for themselves and their workers? Answering this question is crucial for evaluating human capital sharing as a sustainable human development strategy. It also has implications for talent development and league survival strategies, especially for emerging professional women’s sports [11].

Human capital sharing is relevant to high-performance athlete development, especially in situations where interorganizational relationships are used [12,13,14,15]. The most pertinent examples are new professional and semi-professional women’s sports leagues established in Europe (UK Netball Superleague), Australasia (AFL Women’s), and North America (Athletes Unlimited). These leagues often emerge from partnerships between organizations (typically national sport organizations and franchises) that benefit from investment in women athletes [11,13]. Human capital sharing also exists outside of women’s sport. For example, Player Development Contracts in minor league baseball, co-ownership in Italian, Chilean, and Uruguayan association football, and some aspects of player loaning in the Indian Premier League and European association football can be interpreted as human capital sharing.

Thus, we aim to explain why organizations decide to engage in human capital sharing in sport settings. We extend Becker’s theory of human capital investment to explain the conditions that enable organizations to share human capital investment. The theoretical extensions come from a multiple case study of National Pro Fastpitch (NPF) and Kunlun Red Star Hockey Club (KRS). NPF was a women’s professional softball league in United Kingdom comprised of teams from Australia, Canada, China, and Mexico who used the league to develop their teams for the Olympics. KRS is a Chinese hockey club that has partnered with Chinese NSOs and leagues in Russia and Canada to attract, develop, and retain men’s and women’s hockey talent. Both organizations exhibited human capital sharing, which allowed us to examine their human capital sharing strategies.

2. Theoretical Framework

Our conception of human capital sharing builds on human capital theory. Human capital theory was designed to explain investment in people but has not considered situations where organizations share human capital investment. Therefore, we aim to extend human capital theory to account for sharing situations.

2.1. Human Captial Theory

The concept of human capital was first developed in the economics literature [7]. Gary Becker is credited with developing the comprehensive theory of human capital that now underpins research in education, talent development, strategic human resources, and organizational behavior. He described human capital investment as any activity that influenced future monetary or psychic income by increasing the skills, abilities, experience, and knowledge in people [6]. Becker developed his theory by analyzing why firms and people would pay for investments in training (including on-the-job training, formal education, and informal education) [6]. He showed that firms could choose between “making” human capital (by investing in training) or “buying” human capital (by hiring in the open market), an insight that is the foundation of human capital theory in many disciplines, although researchers have since extended his theory to account for competitive advantages, labor market matching, labor market “stickiness,” and team dynamics [5,16,17,18,19].

Becker recognized that organizations play an essential role in “making” human capital by providing on-the-job training [6]. Training increases the marginal productivity of workers, which benefits firms by increasing revenues. Following Krautmann et al.’s extension to sport [20], firms will invest in human capital so long as the present value of the worker’s future productivity exceeds the present value of training costs and wages. Alternatively, organizations can also “buy” human capital by hiring workers who have developed skills in other organizations. Consequently, if labor moves freely, workers’ pay should rise with increased productivity, making training unprofitable to businesses because they cannot capture any returns from training investments [6]. Therefore, if labor markets are competitive and human capital is general, organizations should not have incentives to “make” human capital.

However, firms have ways to profit from on-the-job training. They can shift training costs to workers by paying below-market wages while training [6]. Firms can also provide specific rather than general training to increase workers’ future productivity only for the training firm and not its competitors [6]. Alternatively, firms can use market power and mobility constraints to reduce competition, and consequently wages, for skilled workers [19,20]. Firms will have an incentive to “make” human capital in any of these situations. Acemoglu and Pischke added that labor markets are often imperfectly competitive, so firms have a greater incentive than is often recognized to invest in training [16]. For example, information asymmetries, compressed wage structures, industry- or occupation-specific monopsonies, and reputation effects encourage firms to invest in general training (in contrast to Becker’s original predictions) because firms can capture some surplus from highly skilled workers after the training period [16].

A pivotal extension to human capital theory comes from management scholars, who have considered the role of human capital in providing organizations with sustained competitive advantages [21,22]. The resource-based view of the firm sees competitive advantages as accruing from organizations’ unique and imperfectly replicable endowments of resources [23], of which human resources are crucial [22,24,25]. Organizations can create and maintain a human capital advantage using strategic human resource management such as high-involvement work systems or high-commitment employment practices [3,22].

Management scholars also increasingly recognize that resources alone are not enough to guarantee competitive advantages—the productivity of resources, including human resources, depends on organizations’ capacity to use them effectively [24]. Moreover, Polyhart and Moliterno argued that human capital is an emergent resource, especially in team settings [26]. Polyhart and Moliterno created a theoretical model explaining the conditions for individual-level human capital to emerge as team-level human capital [26]. Team-level human capital depends on the task environment, “enabling states” and individual talent.

Management scholars have also extended the resource-based view to develop a knowledge-based view of the firm [27,28]. According to the knowledge-based view, knowledge, some of which is possessed by employees and some of which is attributed to organizational capabilities, is the most important source of competitive advantage for firms [28,29,30]. For example, tacit knowledge is knowledge that people draw upon in action but is difficult to be consciously aware of, or express in language [31]. Tacit knowledge might provide competitive advantages because it is unique and imperfectly replicable [32]. Research on basketball teams found that collectively held tacit knowledge (measured as shared experience) had positive effects on performance, over and above players’ individual quality [32,33]. In a study of European association football teams, Lechner and Gudmundsson found that experienced managers’ tacit knowledge was necessary to create competitive advantages from the complex interactions between team resources (e.g., internally developed players, externally developed players, finances, group routines) [34].

Importantly, knowledge-based view scholars have raised concerns about the portability of knowledge workers and other human capital across organizations [35,36]. Groysberg et al. found that star security analysts’ performance declined when they moved to firms with less capabilities or equivalent capabilities [35]. Groysberg et al. concluded that part of the human capital that contributes to stars’ performance is embedded in relationships with colleagues [35]. Raffiee and Byun added that performance declines are attenuated in situations where stars have human capital resource complementarities with hiring firms and when new hires have social capital resources to ease their transition [36].

Collectively, management research has added a new angle to how organizations might “make” human capital, especially in teams. However, neither management nor economic scholars have considered situations where organizations share human capital investment. In fact, current research on the portability of human capital suggests that there might be extra barriers to human capital sharing between organizations that do not exist when sharing other resources.

2.2. A Relational View on Human Capital Investment Sharing

Despite more detailed theory regarding the creation, maintenance, and emergence of human capital investments within organizations, there has been less attention on how organizations might share human capital investment. Becker’s theory was designed to explain sharing behavior, but between workers and firms rather than between two organizations. Workers and firms share human capital investment because they each benefit from increased productivity—workers get higher wages, firms increase output. However, it is unclear what would motivate another organization to enter into this sharing relationship, especially when there are costs and drawbacks of coordinating organizational relationships [37,38,39].

One proposition can be made at the outset: for organizations to share human capital investment, the net benefits to each organization must be perceived as greater when working together than when working alone. If working together were no better than working alone, then organizations would be better suited investing in human capital by themselves and keeping the benefits of human capital investment between the organization and the worker. Therefore, an essential theoretical question is what circumstances make it more beneficial for organizations to share human capital investment than to invest alone?

We draw on the relational view of competitive advantage developed by Dyer and Singh and extended by Dyer et al. to examine why organizations might decide to share human capital investment [40,41]. In contrast to market-based or resource-based theories of competitive advantage, Dyer and Singh proposed that organizational dyads and networks were critical to understanding firm performance [40]. They proposed four determinants of rent creation in inter-firm alliances: complementary resources and capabilities, relation-specific assets, knowledge-sharing routines, and effective governance [40].

Revisiting the theory 20 years later, Dyer et al. argued that resource complementarity was the fundamental condition that provided the initial rationale for forming alliances [41]. Moreover, Dyer et al. argued that shared value creation progressed differently depending on whether organizations were highly or lowly independent with each other [41]. In situations with low independence, organizations with complementary resources could create value easily through alliances without making investments, but relationships would be relatively short-lived. In situations with high independence, organizations would need to invest in relationship building to realize benefits from complementary resources, but the relationships would last longer.

In Dyer et al.’s update of the relational view, alliance partners first assess whether potential partners have complementary resources [41]. Complementary resources are “distinctive resources of alliance partners that collectively generate greater rents than the sum of those obtained from the individual endowments of each partner” ([40], pp. 666–667). Complementary resources must also be rare and indivisible to create incentives for each firm to form an alliance. Moreover, organizations must have systems and cultures that are compatible enough to facilitate complementary resource use.

In the context of human capital sharing, it is possible that two organizations could have resources that allow for complementary human capital investment. Complementary human capital investment would generate greater rents for each partner than if each organization invested separately. Thus, complementary resources might make it more beneficial for organizations to share in human capital investment rather than invest alone.

Research on secondments provides some evidence that complementary human capital investment is possible. Secondments refer to a temporary transfer of an employee from one department to another within the same organization or from one organization to another organization [42]. The employee’s home organization typically retains their employment contract and continues to pay salary during the secondment, whereas the host organization bears the cost of onboarding, training, and administration. Secondments serve many purposes but some are consistent with human capital investment sharing. Specifically, Barkworth identified “developmental secondments” as focusing on developing the employee through two-way skill or knowledge transfer between the home and host organizations [42]. The most consistent secondment benefit for organizations is the learning and transfer of skills [42,43,44,45]. Therefore, secondments can create situations where it is more beneficial for organizations to share in the costs of developing an employee rather than making those investments alone.

Although complementarity between organizations provides the conditions for creating value, it does not explain how the value will be split between organizations [46]. Therefore, questions of value appropriation and coopetition are also relevant to the relational view [41,47]. According to Dyer et al., alliances with low interdependence between organizations can be governed through low-cost mechanisms, such contracts, because each organization can easily end the relationship without suffering consequences [41]. However, when interdependencies are high, alliances need more formal and informal safeguards to ensure long-run value capture from high initial investments [48]. Therefore, the relational view suggests that organizations’ abilities to govern alliances efficiently and ensure each organization appropriates sufficient value will be key to human capital investment sharing.

The relational view provides insights into the conditions that make alliances feasible for organizations. However, research is lacking on how the relational view might be integrated with human capital theory to explain human capital investment sharing. Therefore, our research question is: what circumstances lead to human capital sharing decisions by making it more beneficial for organizations to share in human capital investment rather than invest alone?

3. Materials and Methods

The sport industry is an excellent context to consider this question because organizations are increasingly cooperating around elite athlete development, which is a type of human capital investment. Therefore, we used a multiple case study design to examine human capital investment sharing in elite sport. Multiple cases allow each case to be used as an independent experiment to confirm or disconfirm inferences drawn from other cases [49]. Multiple cases yield more robust theories than single cases [50]. We also used an abductive approach to inquiry [51]. Abduction is concerned with making theoretical advances by integrating empirical material with existing theory [51]. There is a well-established body of knowledge on human capital investment; however, we are unaware of any theory on human capital investment sharing. Therefore, an abductive approach was the best way to advance theory on this topic. Lastly, we selected two paradigmatic cases following Flyvberg [52], where national sport organizations (NSOs) worked across sectors with franchises and clubs to invest in athletes’ human capital.

3.1. Case Contexts

Two cases were selected for this study that exhibited human capital sharing. The first case was National Pro Fastpitch (NPF). The NPF was a professional women’s softball league in the US that included national teams from other countries since 2018. Many NPF teams were built on partnerships between US sport franchises and NSOs from other countries (e.g., Australia, Canada, China, Mexico). An example of one such team is the Canadian Wild, created from a partnership between Softball Canada, the Southern Illinois Miners (baseball team), and Visit Southern Illinois (tourism bureau). The Canadian Wild were built on partnerships where each organization shared some of the responsibility of operating the team and derived its own benefit from team operations. Specifically, Softball Canada provided athletes and coaches and paid all salaries, whereas the Southern Illinois Minors provided the facilities, event management expertise, and paid all event management costs. In exchange, Softball Canada used NPF competition to develop their athletes in preparation for winning Olympic medals whereas the Southern Illinois Minors used the athletes to sell tickets, create fans, and ultimately generate revenues for the organization. Therefore, the Canadian Wild is an example of human capital investment sharing because organizations shared in the costs of athlete development and derived benefits from this shared investment. Other examples of human capital sharing in the NPF were the Beijing Shougang Eagles, the Aussie Peppers, and the Cleveland Comets, because each team was built on a partnership between a NSO from a foreign country and a US-based franchise.

The second case was Kunlun Red Star Hockey Club (KRS). KRS is the only professional hockey club in China founded in Beijing in 2016. KRS has fielded a men’s team playing in Russia’s KHL, a second-tier men’s team in Russia, and women’s hockey teams in Canada and Russia. KRS exhibits human capital sharing because organizations collaborate to share in the development of elite hockey players. Specifically, KRS’s mission was to develop elite hockey players in China. Human capital sharing occurred in the various partnerships between KRS and national and private sport organizations. We focus on the relationship between the club and the Chinese Hockey Association (CHA) because this is a common athlete development partnership in elite sport. The KRS and the CHA coordinated to develop hockey talent in China, including sharing the costs of naturalizing foreign-born hockey players who could then play for the KRS professionally and the Chinese national team in international competitions, thereby benefiting both organizations with increased playing talent.

3.2. Data Collection

Data were collected from 43 people across the two case contexts (NPF = 27, KRS = 16). Participants included team executives and coaches (n = 15), league administrators (n = 2), sponsors (n = 2), NSO administrators and governmental representatives (n = 10), and athletes (n = 14). Semi-structured interview guides were tailored to each case context, although common questions were asked about participants’ background and experiences, athlete and sport development, and the partnerships in place in the NPF and KRS. For example, managers were asked versions of the following questions applied to their specific context: “What partnerships existed?”, “How were the partnership formed?” “What were the purposes of the partnerships?” “What were the actual outcomes of the partnerships?” “What factors lead to these actual outcomes?” “What challenges existed in these partnerships?”

Interviews were conducted over the phone and in-person, in English and Chinese during 2019. Interviews lasted from 23 to 107 min with an average length of 47 min. Interviews were audio-recorded and transcribed. Interviews conducted in Chinese were transcribed into Chinese characters and translated into English by a certified translator. A native speaker checked translations, and disagreements in interpretations were discussed and reconciled.

Secondary data were also collected using league, team, and sport names as search terms in LexisNexis, Google, and Baidu search engines to compile news published between January 2015 to February 2020. Articles were included with commentary on leagues, teams, sport administration, or the market context. Articles were excluded if they repeated existing articles, focused on competition results, or were human-interest stories. In total, 305 articles were collected and added to the data set to triangulate the interview findings.

3.3. Data Analysis and Trustworthiness

Three strategies were used to analyze the data. The first strategy was open-coding of interviews and document data to create first-order concepts [53]. First-order concepts retain the detail and complexity of participants’ worlds and force researchers to consider the complexity of the situation under study so that consequent theorizations articulate with social reality [53]. Then, first-order concepts were collected into themes to create second-order concepts, which are abstract, transferable, and connected to existing theory [53]. The second strategy was cross-case analysis. Tables were created to compare the cases according to data structures created during coding [50]. Tables allowed for common themes to be found and tested across contexts. Each case was used to confirm or disconfirm the inferences drawn from the other case [49]. The method helped identify similarities that reflect underlying processes while accounting for variations due to contextual differences. The third strategy was the extended case method [54]. The extended case method involves running exchanges between theory and empirical material to reconstruct existing theory [54]. Specifically, we used the empirical material presented in the two cases to extend human capital theory to explain human capital investment sharing.

Three measures were used to ensure the trustworthiness of the findings. First, secondary data were used to triangulate the interview findings. Second, multiple coders coded a subset of the data to check the interrater reliability of the coding. Krippendorff’s alpha and Guetzkow’s U were calculated, with values interpreted as a high degree of consistency between coders [55,56]. Third, peer debriefing with other sport management researchers was used to ensure the emerging results and interpretations were credible.

4. Results

The findings demonstrate that NPF and KRS engaged in sharing behavior to make investments in athlete development that would be prohibitively expensive to perform individually. Human capital investment sharing requires certain enabling conditions that make it more beneficial for organizations to share investment rather than invest separately. Four enabling conditions were identified as complementary value, limited rivalry value, organizational role specialization, and external relationship factors.

4.1. Athlete Development as Human Capital Sharing

The main rationale for partnerships between organizations in the NPF and KRS was to invest in elite athlete development. For example, a softball player from a foreign country explained the development benefits of playing in the NPF,

we’ve been able to capitalize on that and see those learning curves as players, and coaches, and just as a program kind of everyone collectively take off. Because we were being challenged with both quality and quantity every single day for two months.

(Player 1).

Similarly, an administrator of KRS explained that the club’s mission was to develop elite hockey players in China: “Now we are building a ‘national club,’ the best players [of China] are playing for us, and we put them to the best league in the world, and they can play for China in the 2022!” (Club 1).

Stakeholders also explained that athlete development partnerships were designed to benefit multiple partners. For example, a KRS administrator explained the rationale behind cooperating with the CHA like this, “The club is working with the Chinese Hockey Association to improve the national team’s performance. The Chinese players and naturalized players in our team can extend their hockey career in such professional leagues” (Club 1). According to this administrator, the club and the CHA both benefit from shared investments in athletes’ human capital.

The cases demonstrate that organizations shared human capital investment because it enabled investment in human resources that would be prohibitively expensive if organizations invested separately. For example, NPF actors noted that their teams would not be viable without sharing investment costs. A franchise representative explained.

Under the NPF model, if we were having to pay for the travel and housing and players and coaching staff and all of that, there’s no way from a business model that that would work for us in the size of market that we’re in.

(Franchise 1).

Likewise, NSO representatives explained, “the most cost effective option was if we could find a way to have a partnership with the NPF” (NSO 1). Similarly, playing in international leagues was the most cost-effective way for KRS and the CHA to simulate the competition necessary for developing elite hockey players. For example, a Chinse NSO representative said, “Currently we don’t have a system to cultivate hockey players in China, that’s why we need to rely on these hockey clubs” (NSO 6). Therefore, athlete development in NPF and KRS can be seen as a shared human capital investment because it enabled levels of investment in athlete development that benefited all parties, but would have been prohibitively expensive to perform individually.

4.2. Enabling Conditions of Human Capital Sharing

Now we turn to the research question: what circumstances make it more beneficial for organizations to share in human capital investment rather than invest alone? After analyzing the NPF and KRS cases, we identified four enabling conditions that extend human capital theory to explain why organizations shared human capital investment rather than keep investment to themselves: complementary value, limited rivalry value, organizational role specialization, and relationship factors. These conditions theoretically explain why sharing is viable in some situations but not others. They also explain why human capital sharing is relatively common in the sport industry but isolated to specific contexts outside of sport.

4.2.1. Complementary Value

Human capital sharing was effective in NPF and KRS because the value generated by athletes’ human capital was complementary between organizations. According to Dyer and Singh, complementary resources allow alliance partners to collectively generate greater rents than the sum of those obtained by each partner acting individually [40]. In the NPF and KRS, human capital created complementarities for organizations because they could extract more value from the resource because another organization had used it. Athletes’ human capital is often complementary because it usually becomes more productive with use (except for aging or injury), whereas other resources typically become less productive with use.

For example, multiple sport organizations in China benefited from using the same athletes. A member of the General Sport Administration of China explained how KRS benefited Chinese hockey by employing athletes,

I think that KRS is a connection between the hockey players and the hockey market.

First, it can help the country find enough talent players. Second, it is playing in Russia and Canada, therefore, many players can play in a higher platform. That’s great.

(NSO 7).

Whereas organizations typically avoid having others use their resources, KRS is encouraged to employ Chinese athletes and play them in top competitions to improve the stock of human capital for other sport organizations in China. Similar dynamics were observed in the NPF, where NSOs used league competition to qualify for and train for the Olympics. For example,

the last two years for us has been try and qualify for Tokyo. So when you nut it out [sic] and say, “we wanted to play high level competition, we wanted to face good pitching, we wanted to put our girls in that good daily training environment and help them make gains in different areas,” all of that was driven towards qualifying for the Olympics. Has it met our objectives? Yes, because we qualified. When people ask me was it a success? I mean honestly, in my opinion, if we hadn’t been to the NPF the last two years we wouldn’t have qualified.

(NSO 3)

Complementary value is an enabling condition of human capital sharing because it makes human capital more productive with use, rather than less productive, so that organizations can enhance the returns on investment through sharing human capital. When human capital has complementary value, sharing investment can be more effective than acting independently because the benefits accruing to sharing organizations increase rather than decrease. Therefore, human capital sharing is more likely in situations where human capital has complementary value.

4.2.2. Limited Rivalry Value

Human capital sharing was effective in NPF and KRS because the value generated by athletes’ human capital was not rivalrous. Rivalry value refers to situations when individual benefits decrease with increasing users [57]. Most resources are rivalrous because one organization uses them at the expense of another. For example, energy, finances, materials, land and attention are all rivalrous resources. Alternatively, resources can be non-rivalrous if one organization can capture value without affecting how much another organization can capture. Athletes in the NPF and KRS exhibited limited rivalry value because, although there were some conflicts over the use of athlete resources, organizations could capture value from athletes without hindering each other’s value capture.

NPF athletes’ value had limited rivalry because each partner organization sought a different type of value. Franchises focused on creating entertaining events and using elite-level athletes to attract youth to games and other paid events (Franchise 1; Franchise 3; Franchise 8–9). For example, one franchise representative explained, “we utilize [the players] as much we possibly can to get access to youth athletes” (Franchise 10). NSOs, on the other hand, did not care about the value generated from spectator sport events—they focused on developing athletes to perform better at international competitions (NSO 1–4). For example, an NSO representative explained, “we wanted to play high level competition, we wanted to face good pitching, we wanted to put our girls in that good daily training environment and help them make gains in different areas.” (NSO 3). In theoretical terms, the value sought from athletes was of limited rivalry because each organization could capture its own type of value without getting in the way of other organizations. One national team athlete put it like this.

They [NPF] want participation on their end, and my good game to showcase to people, and we want preparation. So, every team that they roll out in the NPF, they’re looking to win where we’re looking to train people.

(Player 4)

Similarly, KRS partnered with the CHA to naturalize foreign-born players that each organization could use for their own type of value capture: professional and Olympic competition, respectively (Club 1; NSO 7).

Limited rivalry value is an enabling condition for human capital sharing because it allows organizations to reduce the costs of investment by sharing without needing to split the returns. When human capital has limited rivalry value, sharing investment can be more effective than acting independently. Therefore, human capital sharing is more likely in situations where human capital has limited rivalry value between organizations.

4.2.3. Organization Role Specialization

Human capital sharing was cost-effective in the NPF and KRS because different organizations were better off specializing in their unique role in athlete development services rather than adding extra roles to their organizational structure and attempting to provide the complete service themselves. For example, NSOs playing in the NPF deliberately sought partnerships with franchises to provide facilities, event management, and game-day operations expertise (see also [58]). One NSO explained.

We just wanted to work with one organization and, we come in, plop our team in there, play our games, move around the country and that’s all we have to worry about, softball. Somebody else handles all the business arrangements for us and so that’s the arrangement we had here. The stadium, we don’t have to worry about it.

(NSO 1).

Another NSO explained how both organizations fit together to make a whole:

What we needed was a partner that would give us a venue to play out of and help support the game-day operations piece of it, so that, in essence, we would bring a piece to it, they would bring a piece to it and those two pieces would create a whole.

(NSO 2).

The idea of two pieces creating a whole reflects the underlying spirit of specialization that enabled human capital sharing in the NPF and KRS. Specialization enabled each organization to focus on their expertise and maintain lower costs than if organizations attempted to work independently. The cost-saving benefits of role specialization were also evident for KRS. Rather than create a league in China, KRS partnered with international organizations and leagues that already provided top competition (NSO 6; Club 1; Player 9; Player 10).

Organizational role specialization is an enabling condition for human capital sharing because it allows organizations to reduce the cost of human capital investment by partnering with other organizations that can provide services cheaply and effectively. When organizational role specializations are possible, sharing investment can be more effective than acting independently. Therefore, human capital sharing is more likely in situations where organizations can specialize in investment roles.

4.2.4. External Relationship Factors

Human capital sharing in NPF and KRS did not happen in a vacuum. Many factors external to the central athlete development strategy facilitated partnerships. For example, KRS had political reasons to play in Russian leagues. Vladimir Putin openly supported efforts to help China improve hockey [59], and the parent company of KRS conducted business in Russia (NSO 6). In the NPF, partners often commented on the reciprocity they enjoyed with each other. For example, an NSO representative said, “from my perspective, the relationship exceeded [my expectations] because these folks quite literally made us feel a part of the community from the very first day we arrived, treated us like royalty, made these women feel like true professionals” (NSO 2). Collectively, then, it appears that many of the determinants of interorganizational relationships identified by Barringer and Harrison and Oliver also facilitated human capital sharing [38,39].

Relationship factors external to the human capital investment strategy can facilitate human capital sharing by making it easier to create and maintain sharing arrangements. When external relationship factors facilitate partnerships, sharing investment can be more effective than acting independently. Therefore, human capital sharing is more likely in situations where external relationship factors facilitate interorganizational relationship formation and maintenance.

5. Discussion

This research aimed to develop human capital investment sharing theory in sports settings. We used case studies of the NPF and KRS to create theoretical extensions that explain human capital investment sharing (see

Table 1. Study themes with theoretical explanation and examples.

Theme	Explanation	Example
Human capital sharing	Viable if each organization believes the sharing arrangement yields a better value capture proposition than if investments were performed separately.	NSOs and franchises partnered to create NPF teams rather than have teams individually
Complementary value	Sharing leads to higher benefits for each organization than if investments were performed separately.	KRS and CHA each perceived benefits from having athletes compete in each other’s teams
Limited rivalry value	Sharing leads to splitting costs without splitting benefits compared with investing separately	NSOs and franchise sought different types of value from NPF athletes
Organizational role specialization	Sharing minimizes costs or maximizes benefits compared with investing separately	NSOs specialized in training and coaching whereas franchises specialized in hosting events
External relationship factors	External factors add other benefits or costs to creating and maintaining sharing relationships	KRS benefited from parental company activities in Russia and Putin’s support

). These theoretical extensions can be translated to examine human capital sharing in other sport and non-sport contexts; however, as the following discussion shows, we believe the enabling conditions identified in this study make shared investment more likely to occur in sport than in other industries. These theoretical extensions also demonstrate that sharing can be a viable third strategy for sustainable human capital development (alongside “making” and “buying”) but only in certain well-defined situations.

5.1. Human Capital Investment Sharing Theory

Case studies of the NPF and KRS demonstrate that human capital sharing enabled levels of investment in athlete development that would have been unattainable working individually. Theoretically, we propose the following: organizations will share human capital investment if each organization believes the sharing arrangement yields a better value capture proposition than if investments were performed separately. It is necessary that each organization sees benefits because human capital sharing involves cooperation, as seen in all the partnerships described in our data. We emphasize the importance of perceived value capture [60]. Value can be different for organizations with different objectives, such as US franchises prioritizing profit and NSOs prioritizing Olympic medals.

In addition to explaining why organizations share human capital investments, our case studies demonstrate four enabling conditions. Enabling conditions make sharing arrangements more likely to yield better value capture propositions and, therefore, explain why organizations would share human capital investment rather than invest separately. Specifically, complementary value means that organizations can capture more value from sharing human capital with other organizations. Limited rivalry value means that organizations can each capture value from shared human capital without inhibiting each other’s value capture activities. Organizational role specialization means that organizations can minimize investment costs by sharing human capital. Lastly, external relationship factors can facilitate human capital sharing by making it easier to create and maintain partnerships necessary to engage in sharing behavior. If these enabling conditions exist, human capital sharing might offer a better value proposition than human capital making or human capital buying. Therefore, these conditions are theoretical extensions to classic human capital theory, which explains why organizations invest in human capital, but does not explain why organizations would share human capital investment [6].

The relational view of the firm helps explain why these enabling conditions are important for alliances. According to the relational view, complementary resources are the initial reason for forming alliances [41], and complementary value was one of the reasons elite sport organizations engaged in human capital sharing. The main difference between the relational view and our findings is that our study illustrates how one resource can be complementary when used by multiple organizations. Alternatively, Dyer and Singh proposed that organizations could have separate resources that complemented each other [40]. It might be that human capital is unique in providing complements for multiple organizations because it is one of the few resources that becomes more useful when used multiple times. Additionally, organizational role specialization enhances the effects of complementarity by ensuring that alliances give organizations access to resources they would not otherwise have.

The relational view also explains that alliances are more likely to succeed when governance costs are kept low [40,41]. Limited rivalry value helps minimize governance costs because organizations do not threaten each other’s value capture opportunities. External relationship factors can also help minimize governance costs because they facilitate the creation and maintenance of sharing relationships.

A critical implication of the enabling conditions identified in this study is that they show, theoretically, why human capital sharing exists in the sports industry but is less common in other industries. Specifically, athletes’ human capital is limited rivalry in ways not found in other industries. Athletes’ human capital is limited rivalry because athletes create different value types. For example, their physical performances help teams win games and they often have substantial symbolic value as brands [61]. As seen in the NPF, a team can employ an athlete simultaneously as a company can have athletes endorse products because performance value and symbolic value are non-rivalrous. Sometimes rivalries emerge, such as for KRS when professional competition clashed with local team competition. Nevertheless, athletes are remarkably versatile in the types of value they create for others. Other types of human capital are less versatile, so human capital sharing is more prevalent in the sport industry than in other industries.

On the other hand, other industries present situations where human capital is complementary, and might be suited for human capital investment sharing. For example, one of the main benefits found in secondment research is knowledge and skill-transfer between organizations [42,43,44,45]. In these situations, both organizations benefit from having the other train and employee their workers, meaning human capital is complementary across organizations. Moreover, organizational role specialization and external relationship factors also exist in other industries. At the same time, the four enabling conditions identified in this study explain why human capital sharing is limited to specific situations, whereas making and buying are more common strategies [8,10].

However, there are questions about human capital investment sharing that remain to be answered in future research. First, it is unclear whether all of the enabling conditions must be in place for human capital investment sharing to be a viable option or whether one enabling condition is sufficient. Based on the relational view [41], we speculate that one enabling condition is sufficient but that enabling conditions will have a cumulative effect on the likelihood of human capital sharing. However, it is also possible that some factors will have a negative effect on human capital sharing. For example, organizations that have legal, institutional, social, or cultural barriers to that hinder relationship building might not share human capital investment even if they are otherwise well-suited for sharing. Therefore, future research is needed to further develop and test this theory.

One context that might be useful for testing the enabling conditions identified in this article is the association football loan market [62,63]. Although teams loan players to each other for multiple reasons, some of their behavior appears to be consistent with human capital sharing. Specifically, teams often loan players to other teams so that they have opportunities to develop at the host team, providing benefits for both the host and home team when the player returns. If so, the enabling conditions identified in this article should explain incidences of loaning behavior.

Table 2. Enabling conditions and predictions applied to association football.

Theme	Explanation
Complementary value	Teams will be more likely to agree on a loan when they believe the loan increases the value of the player to home and host team. This should be evidenced by loaned players having more playing time at a host team than they would have at the home team. Loaned players should also increase in value as evidenced in transfer fees following a loan.
Limited rivalry value	Teams will be more likely to agree on a loan when they do not compete over the same value. Thus, home teams will loan when they cannot use the player on their team otherwise. Host and home teams will also be more likely to loan when they are not direct competitors with each other, as measured by championship standings and division membership.
Organizational role specialization	Teams will be more likely to agree on a loan when they each have a specialized role in the player’s development. Loans should be less likely between two organizations that specialize in developing players and more likely between an organization that specializes in developing players and another that specializes in competing.
External relationship factors	Teams will be more likely to agree on a loan when they have an established relationship. Loans should be more likely between teams with a history of loans or other interorganizational relationships, such as the same owner.

describes predictions developed from human capital sharing in the context of the football player loan market. At the same time, recent research has illustrated that professional football teams’ loaning and trading strategies are highly contingent on the economic, financial, and sporting characteristics of clubs [63]. It is likely that clubs’ strategic choices to share human capital investment are also limited by their resources. Therefore, future research on human capital sharing in the loan market or other contexts should identify organizational variables that interact with the enabling conditions described in Table 2.

5.2. Managerial Implications

The theory developed in this article has many implications for sport managers. First, other women’s leagues or emerging sports could use human capital sharing arrangements to make league entry viable for more teams. Following the NPF and KRS examples, leagues can facilitate partnerships between NSOs and franchises that allow for investment sharing. This strategy will help leagues expand with more teams and more locations. It will be especially beneficial for leagues interested in attracting international teams. However, league executives should also know that human capital sharing requires certain enabling conditions.

For example, a Chinese team has been accepted into the French National Volleyball League (LNV), “League A” for two seasons to prepare for the Paris 2024 Olympic Games [64]. On the surface, this arrangement appears similar to the NPF and KRS. The Chinese team will have opportunities to compete against the best competition in the world and LNV will benefit from an undisclosed financial benefit and possible sales to Chinese markets [64]. However, we recommend that Chinese and French stakeholders consider the enabling conditions identified in this study as they build partnerships between NSOs, clubs, LNV, host cities, and facilities.

Research on organizational aspects of athlete development has shown that NSOs increasingly see high-level competition and cutting-edge facilities as essential parts of their elite athlete development strategy [58]. Human capital sharing provides a way for NSOs to benefit from high-level competition and facilities without developing the competencies within their organizations. Therefore, human capital sharing can be cost-effective to further elite athlete development. Indeed, all the NSOs interviewed for this case study attributed Olympic qualification and success to human capital sharing.

Given the restrictive circumstances that enable human capital sharing, readers might question the transferability of our theory to non-sport contexts. We believe the theory is transferable for two reasons. First, our theoretical extensions explain why human capital sharing is not as prevalent outside of sport. Second, in situations where human capital sharing exists, our theory helps explain why. For example, developmental secondments meet the criteria of having complementary human capital and seem to also have organizational role specialization and external relationship factors [42,43,44,45]. Therefore, the enabling conditions of human capital sharing are not restricted to the sport industry. Future research must evaluate other opportunities for human capital sharing outside of sport.

5.3. Limitations

We used a multiple case study approach to extend theory related to human capital investment. This approach revealed many useful theoretical extensions but also had limitations. First, it is possible that other enabling conditions exist in theory but were not observed in our case studies. For example, human capital theory recognizes risks associated with human capital investment. Therefore, it is possible that human capital sharing could be facilitated in situations where sharing behavior reduces risks. For example, player development contracts in minor league baseball and minimum age rules in the National Football League might be considered risk-reduction partnerships. Therefore, future research should examine other sharing arrangements to identify additional enabling conditions. Second, although the theory from this study is logically generalizable, there are many unique circumstances present in our case studies that might limit the transferability of the results. For example, a critical question we were unable to answer is whether one enabling condition is sufficient to create human capital sharing or whether all conditions are necessary. Third, although we sought to generate theory that could enter broader conversations around human capital investment in management, education, and politics, our focus on sport industry case studies limits the transferability of this study to non-sport contexts.

6. Conclusions

Sports organizations are increasingly cooperating to invest in elite athlete development, which is a type of human capital investment sharing. Our study shows that organizations will share human capital investment if each organization believes the sharing arrangement yields a better value capture proposition than if investments were performed separately. Organizations are more likely to perceive sharing to be beneficial when human capital has complementary value, when human capital produces limited rivalry value, when organizations can specialize, and when external relationships factors facilitate relationships. Sharing can be a viable strategy for sustainable human capital development, but only in certain well-defined situations.