19 Jun 2019 4 min read

The expected winners of the 2019 FIFA Women’s World Cup

By Fadi Zaher , Clare Payn , Wei Yang

The 2019 FIFA Women's World Cup has garnered much attention. But can we use economic factors to predict the winners?

Historically a neglected sport, women’s football is growing in popularity and participation. In the UK, the 2019 FIFA Women’s World Cup has been avidly followed, with the England and Scotland game drawing a record 6.1 million viewers on BBC television.

The men’s FIFA World Cup has been much analysed by investment firms using quantitative models with economic and financial data to predict the winners.

So we decided to try to predict the winners of the women’s competition using economic factors and the national teams’ previous performance.

The sovereign governance index

We used the World Governance Index (WGI) developed by the World Bank, a broad cross-country comparison, to evaluate governance and social trends over time. It captures data from public and private-sector surveys, including:

(i) Voice and accountability (which captures perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media).
(ii) Political stability and absence of violence (which measures perceptions of the likelihood of political instability).
(iii) Government effectiveness (which captures perceptions of the quality of public services, the quality of the civil service, and the degree of its independence from political pressures).
(iv) Regulatory quality (which measures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private-sector development, assessed for example by the existence of any discriminatory policies and the ease of starting a new business).

The World Bank has more details on these criteria.

The most common participants in the FIFA Women's World Cup

Participation is dominated by developed countries, which typically have higher sovereign and socioeconomic scores, with some exceptions. The US, Germany, Japan, Australia, Brazil, Canada, Nigeria, Norway, and Sweden have participated in all FIFA Women's World Cups since 1991. The US is the most consistent nation in terms of best and worst position in previous World Cups (see Table 1 below).

Note: Composite score. 100 is the best and 0 is the worst.

We found a positive relationship between high governance/socioeconomic scores and a nation’s performance and ability to qualify for the World Cup.

Note: Governance/socioeconomic score refers to the average of the Worldwide Governance Indicators in the years prior to the World Cup. Linear regression has found a relationship between the World Cup ranking and the governance scores.

Prediction model based on governance, socioeconomics and macroeconomic indicators

We constructed a four-factor model using the WGI index incorporating sovereign governance, participation in previous World Cups, and Gross Domestic Product (GDP) as an indicator of the talent pool for player selection. Historically, governance/socioeconomic scores and GDP have been the most significant factors in predicting the final results of the FIFA Women’s World Cup.

We therefore project that the US will remain the powerhouse of women’s football, lifting the 2019 trophy. Germany, Japan and China should reach the semi-finals. Sorry, England.

Note: The predication model is a multi-linear regression model using the worldwide governance score, historical participation, numbers of championships won, and the nations’ weights in world GDP. This blog presents a model forecast and it represents one of the many possibilities of the tournament's final result, as it depends on final stage draws.

In the corporate world, well governed companies are likely to be more resilient over the long term and deliver stronger performance for shareholders. Human-capital issues such as gender diversity, equal opportunities, and human rights could enhance companies’ operational performance. Investors, customers and employees are more likely to want to be part of or be associated with that company, allowing them to innovate, grow and succeed. Arguably, this should be no different in a nation’s performance in sports.

An enlarged international audience for the Women’s World Cup might just raise countries’ social governance standards, like the strong trend being witnessed in the corporate world.

Fadi Zaher

Head of Index Solutions, Index Funds

Fadi is a master of many trades with his focus across Index, Asset Allocation and Factor Based Investing. This is probably no surprise given his financial experience in the past 14 years ranges from heading up Barclays Wealth’s Fixed Income unit and Kleinwort Benson’s Bonds and Currencies teams, to working at the European Central Bank and even a stint researching and lecturing in finance and econometrics in Sweden. When he’s not honing his financial CV, Fadi can be found in his garden, tending to his plants with a particular fondness for his mint collection.

Fadi Zaher

Clare Payn

Senior Global ESG & Diversity Manager

Clare is responsible for the team’s stewardship activities for the technology, media and utilities sectors. She communicates with companies, investors and other market participants on various ESG issues, with a specific focus on diversity and other social issues, and she chaired the UK’s 30% Club Investor Group for three years. Clare sits on several internal and external committees focused on diversity and inclusion. With over 20 years’ ESG experience, you could consider ESG to be her life, but Clare is also a committed runner and has a passion for fashion.

Clare Payn

Wei Yang

Index Specialist and Index Strategist

Wei is the Index Investment Specialist working on index research and development and on creating index solutions for investors. Wei has a CV that ranges across several different areas of the financial markets, including roles in Investment Advisory at Barclays Wealth and Solution Consulting at Moody’s Analytics. Outside work, he is developing a keen interest in African adventures and is a devoted Bon Jovi fan.

Wei Yang