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Firms on SourceForge


  • Eilhard, Jan


This paper explores empirically what factors influence a firm’s decision to contribute and to take leadership in open source projects. Increasing firms’ participation in the development of open source software (OSS) is generally perceived as a puzzle. Assuming that firms face a ”Make-or-Buy” decision before using OSS, we argue that contribution is in fact the best way for them to keep control of their supplier in a context where incomplete open source licenses govern transactions. Building on this proposition, we derive predictions on the drivers of firms’ contribution and leadership in open source projects, and test them on a unique dataset of 4,808 open source projects extracted from Sourceforge. Our empirical findings confirm the predictions and lend support to our hypotheses.

Suggested Citation

  • Eilhard, Jan, 2008. "Firms on SourceForge," MPRA Paper 7809, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7809

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    References listed on IDEAS

    1. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    2. Gooroochurn, Nishaal & Hanley, Aoife, 2007. "A tale of two literatures: Transaction costs and property rights in innovation outsourcing," Research Policy, Elsevier, vol. 36(10), pages 1483-1495, December.
    3. Josh Lerner & Jean Tirole, 2005. "The Economics of Technology Sharing: Open Source and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 99-120, Spring.
    4. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    5. James Love & Stephen Roper, 2002. "Internal Versus External R&D: A Study of R&D Choice with Sample Selection," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 239-255.
    6. Kamien, Morton I. & Zang, Israel, 2000. "Meet me halfway: research joint ventures and absorptive capacity," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 995-1012, October.
    7. Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.
    8. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123-123.
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    Cited by:

    1. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    2. Sebastian von Engelhardt & Andreas Freytag & Christoph Schulz, 2013. "On the Geographic Allocation of Open Source Software Activities," International Journal of Innovation in the Digital Economy (IJIDE), IGI Global, vol. 4(2), pages 25-39, April.

    More about this item


    Open source; transaction cost; governance; firm boundaries; software;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets

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