Firm Assets and Investments in Open Source Software Products
AbstractOpen source software (OSS) has recently emerged as a new way to organize innovation and product development in the software industry. This paper investigates the factors that explain the investment of profit-oriented firms in OSS products. Drawing on the resource-based theory of the firm, we focus on the role played by pre-OSS firm assets both upstream and downstream, in the software and the hardware dimensions, to explain the rate of product introduction in OSS. Using a self-assembled database of firms that have announced releases of OSS products during the period 1995-2003, we find that the intensity of product introduction can be explained by a strong position in software technology and downstream market presence in hardware. Firms with consolidated market presence in proprietary software and strong technological competences in hardware are more reluctant to shift to the new paradigm. The evidence is stronger for operating systems than for applications. The fear of cannibalization, the crucial role of absorptive capacity, and complementarities between hardware and software are plausible explanations behind our findings.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 05-10.
Date of creation: 2005
Date of revision:
Contact details of provider:
Web page: http://www.druid.dk/
Product Introduction; Open Source Software; Absorptive Capacity;
Find related papers by JEL classification:
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-08-20 (All new papers)
- NEP-BEC-2005-08-20 (Business Economics)
- NEP-FMK-2005-08-20 (Financial Markets)
- NEP-ICT-2005-08-20 (Information & Communication Technologies)
- NEP-IND-2005-08-20 (Industrial Organization)
- NEP-INO-2005-08-20 (Innovation)
- NEP-MIC-2005-08-20 (Microeconomics)
- NEP-TID-2005-08-20 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Erik Brynjolfsson & Chris F. Kemerer, 1993.
"Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market,"
Working Paper Series
158, MIT Center for Coordination Science.
- Erik Brynjolfsson & Chris F. Kemerer, 1996. "Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market," Management Science, INFORMS, vol. 42(12), pages 1627-1647, December.
- Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- James Bessen & Robert M Hunt, 2004.
"An Empirical Look at Software Patents,"
Levine's Working Paper Archive
122247000000000167, David K. Levine.
- Terza, Joseph V., 1998. "Estimating count data models with endogenous switching: Sample selection and endogenous treatment effects," Journal of Econometrics, Elsevier, vol. 84(1), pages 129-154, May.
- Gandal, Neil, 2001.
"The dynamics of competition in the internet search engine market,"
International Journal of Industrial Organization,
Elsevier, vol. 19(7), pages 1103-1117, July.
- Gandal, N., 2000. "The Dynamics of Competition in the Internet Search Engine Market," Papers 1-2000, Tel Aviv.
- Gandal, Neil, 2000. "The Dynamics of Competition in the Internet Search Engine Market," Competition Policy Center, Working Paper Series qt8jk0904s, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Gandal, Neil, 2001. "The Dynamics of Competition in the Internet Search Engine Market," Department of Economics, Working Paper Series qt0h17g08v, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Neil Gandal, 2001. "The Dynamics of Competition in the Internet Search Engine Market," Microeconomics 0012003, EconWPA.
- Mitchell, Will & Singh, Kulwant, 1992. "Incumbents' use of pre-entry alliances before expansion into new technical subfields of an industry," Journal of Economic Behavior & Organization, Elsevier, vol. 18(3), pages 347-372, August.
- Alfonso GAMBARDELLA & Bronwyn H. HALL, 2004.
"Propriety vs. Public Domain Licensing of Software and Research Products,"
Economics Working Papers
ECO2004/15, European University Institute.
- Alfonso Gambardella & Bronwyn H. Hall, 2005. "Proprietary vs. Public Domain Licensing of Software and Research Products," NBER Working Papers 11120, National Bureau of Economic Research, Inc.
- Gandal, Neil & Greenstein, Shane & Salant, David, 1999.
"Adoptions and Orphans in the Early Microcomputer Market,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 47(1), pages 87-105, March.
- Gandal, N. & Greenstein, S. & Salant, D., 1995. "Adoptions and Orphans in the Early Microcumputer Market," Papers 02-95, Tel Aviv.
- Neil Gandal & Shane Greenstein & David Salant, 1995. "Adoptions and Orphans in the Early Microcomputer Market," Industrial Organization 9502002, EconWPA.
- Neil Gandal & Shane GreenStein & David Salant, 1997. "Adoptions and Orphans in the Early Microcomputer Market," CARE Working Papers 9705, The University of Texas at Austin, Center for Applied Research in Economics.
- Pennings, J.M. & Harianto, F., 1992. "The diffusion of technological innovation in the commercial banking industry," Open Access publications from Tilburg University urn:nbn:nl:ui:12-382782, Tilburg University.
- Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984.
"Econometric Models for Count Data with an Application to the Patents-R&D Relationship,"
NBER Technical Working Papers
0017, National Bureau of Economic Research, Inc.
- Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
- Lerner, Josh & Tirole, Jean, 2002. "Some Simple Economics of Open," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
- Sandro Mendonça & Tiago Santos Pereira & Manuel Mira Godinho, 2004.
"Trademarks as an Indicator of Innovation and Industrial Change,"
LEM Papers Series
2004/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Mendonca, Sandro & Pereira, Tiago Santos & Godinho, Manuel Mira, 2004. "Trademarks as an indicator of innovation and industrial change," Research Policy, Elsevier, vol. 33(9), pages 1385-1404, November.
- Bresnahan, Timothy F & Greenstein, Shane, 1999.
"Technological Competition and the Structure of the Computer Industry,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 47(1), pages 1-40, March.
- Timothy F. Bresnahan & Shane Greenstein, 1997. "Technological Competition and the Structure of the Computer Industry," Working Papers 97028, Stanford University, Department of Economics.
- Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-71, September.
- Paola Giuri & Matteo Ploner & Francesco Rullani & Salvatore Torrisi, 2004. "Skills, Division of Labor and Performance in Collective Inventions. Evidence from the Open Source Software," LEM Papers Series 2004/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Jean-Michel Dalle & Paul A. David, 2005. "SimCode: Agent-based Simulation Modelling of Open-Source Software Development," Industrial Organization 0502008, EconWPA.
- Arora, Ashish & Gambardella, Alfonso, 1994. "Evaluating technological information and utilizing it : Scientific knowledge, technological capability, and external linkages in biotechnology," Journal of Economic Behavior & Organization, Elsevier, vol. 24(1), pages 91-114, June.
- Rajiv Dewan & Bing Jing & Abraham Seidmann, 2003. "Product Customization and Price Competition on the Internet," Management Science, INFORMS, vol. 49(8), pages 1055-1070, August.
- Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keld Laursen).
If references are entirely missing, you can add them using this form.