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Open innovation and within-industry diversification in small and medium enterprises: The case of open source software firms

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  • Colombo, Massimo G.
  • Piva, Evila
  • Rossi-Lamastra, Cristina

Abstract

This paper examines the within-industry diversification of software small and medium enterprises that collaborate with the open source software community (OSS SMEs). In doing so, it offers new insights into the association between open innovation and diversification. We rely on arguments inspired by the literature and evidence collected through interviews with OSS SMEs’ top managers to investigate factors that favor or hinder within-industry diversification. First, in line with the mainstream diversification literature, we focus attention on the role of firm size. Second, in the spirit of the open innovation research, we concentrate on the mechanisms that OSS SMEs put in place to get access to the external resources of the OSS community. Econometric evidence on 100 European OSS SMEs shows that firm size is negatively associated to within-industry diversification, while OSS SMEs that have contributed to a larger number of OSS projects have a more diversified portfolio of software products. Furthermore, we provide preliminary evidence that the practice of authorizing firm programmers to contribute autonomously to OSS projects of their own choice during working hours may be positively associated to within-industry diversification only if OSS SMEs possess adequate internal technological resources.

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  • Colombo, Massimo G. & Piva, Evila & Rossi-Lamastra, Cristina, 2014. "Open innovation and within-industry diversification in small and medium enterprises: The case of open source software firms," Research Policy, Elsevier, vol. 43(5), pages 891-902.
    • Handle: RePEc:eee:respol:v:43:y:2014:i:5:p:891-902
    DOI: 10.1016/j.respol.2013.08.015
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    3. Tao Li & Junlin Zhu & Jianqiang Luo & Chaonan Yi & Baoqing Zhu, 2023. "Breaking Triopoly to Achieve Sustainable Smart Digital Infrastructure Based on Open-Source Diffusion Using Government–Platform–User Evolutionary Game," Sustainability, MDPI, vol. 15(19), pages 1-24, October.
    4. Byungun Yoon & Juneseuk Shin & Sungjoo Lee, 2016. "Open Innovation Projects in SMEs as an Engine for Sustainable Growth," Sustainability, MDPI, vol. 8(2), pages 1-27, February.
    5. Colombo, Massimo G. & D’Adda, Diego & Pirelli, Lorenzo H., 2016. "The participation of new technology-based firms in EU-funded R&D partnerships: The role of venture capital," Research Policy, Elsevier, vol. 45(2), pages 361-375.
    6. Bernd Ebersberger & Nils Mevenkamp, 2016. "Open Innovation in Eastern Europe and Central Asia," Journal of Business Administration Research, Journal of Business Administration Research, Sciedu Press, vol. 5(2), pages 8-19, October.
    7. Sahrish Ahmed & Hasliza Abdul Halim & Noor Hazlina Ahmad, 2018. "Open and Closed Innovation and Enhanced Performance of SME Hospitals—A Conceptual Model," Business Perspectives and Research, , vol. 6(1), pages 1-12, January.
    8. Tsai, Fu-Sheng & Cabrilo, Sladjana & Chou, Hsin-Hui & Hu, Feng & Tang, Au Due, 2022. "Open innovation and SME performance: The roles of reverse knowledge sharing and stakeholder relationships," Journal of Business Research, Elsevier, vol. 148(C), pages 433-443.
    9. Carlo Corradini & Pelin Demirel & Giuliana Battisti, 2016. "Technological diversification within UK’s small serial innovators," Small Business Economics, Springer, vol. 47(1), pages 163-177, June.
    10. Aiping Tao & Qi Qi & Yi Li & Dan Da & Valentina Boamah & Decai Tang, 2022. "Game Analysis of the Open-Source Innovation Benefits of Two Enterprises from the Perspective of Product Homogenization and the Enterprise Strength Gap," Sustainability, MDPI, vol. 14(9), pages 1-22, May.
    11. Roszkowska Dorota, 2017. "External Knowledge Sourcing and Innovation Processes in Modern Economic Environment," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(2), pages 39-56, June.
    12. Ronen Harel & Dafna Schwartz & Dan Kaufmann, 2020. "Funding Access and Innovation in Small Businesses," JRFM, MDPI, vol. 13(9), pages 1-16, September.
    13. Islam, Mazhar & Miller, Jacob & Park, Haemin Dennis, 2017. "But what will it cost me? How do private costs of participation affect open source software projects?," Research Policy, Elsevier, vol. 46(6), pages 1062-1070.
    14. Robert Stanisławski, 2020. "Open Innovation as a Value Chain for Small and Medium-Sized Enterprises: Determinants of the Use of Open Innovation," Sustainability, MDPI, vol. 12(8), pages 1-24, April.
    15. Pietro Amenta & Alessio Ishizaka & Antonio Lucadamo & Gabriella Marcarelli & Vijay Vyas, 2020. "Computing a common preference vector in a complex multi-actor and multi-group decision system in Analytic Hierarchy Process context," Annals of Operations Research, Springer, vol. 284(1), pages 33-62, January.
    16. Christopher Coghlan & JoAnne Labrecque & Yu Ma & Laurette Dubé, 2020. "A Biological Adaptability Approach to Innovation for Small and Medium Enterprises (SMEs): Strategic Insights from and for Health-Promoting Agri-Food Innovation," Sustainability, MDPI, vol. 12(10), pages 1-21, May.
    17. Ronen Harel & Dafna Schwartz & Dan Kaufmann, 2021. "The relationship between innovation promotion processes and small business success: the role of managers’ dominance," Review of Managerial Science, Springer, vol. 15(7), pages 1937-1960, October.
    18. Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    19. Dhir, Sanjay & Ongsakul, Viput & Ahmed, Zafar U. & Rajan, Rishabh, 2020. "Integration of knowledge and enhancing competitiveness: A case of acquisition of Zain by Bharti Airtel," Journal of Business Research, Elsevier, vol. 119(C), pages 674-684.
    20. Ronen Harel & Dafna Schwartz & Dam Kaufmann, 2019. "Open Innovation In Small Businesses In The Industry And Craft Sectors," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 1-33, May.

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