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Innovative Software Business Strategies: Evidence from Finnish Firms


  • Harison, Elad
  • Koski, Heli


Our study aims at shedding light on the innovative business strategies in the soft-ware sector and particularly providing a better understanding of the economics underlying the supply of Open Source Software (OSS). We use survey data collected from 170 Finnish software companies to investigate the determinants of the choice of OSS production. Our study focuses on the role of a firms absorptive capacity in its adoption of OSS supply as a business strategy. We find that the quality of a firms human capital indeed matters : those companies that supply OSS solutions also have relatively more highly educated employees. However, our data do not indicate that a firm`s accumulated intellectual property affects in any significant way its choice to apply OSS-based strategy.

Suggested Citation

  • Harison, Elad & Koski, Heli, 2006. "Innovative Software Business Strategies: Evidence from Finnish Firms," Discussion Papers 1042, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1042

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    References listed on IDEAS

    1. C. Antonelli, 2007. "Localized Technological Change," Chapters,in: Elgar Companion to Neo-Schumpeterian Economics, chapter 16 Edward Elgar Publishing.
    2. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    3. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    4. Cowan, Robin, 1990. "Nuclear Power Reactors: A Study in Technological Lock-in," The Journal of Economic History, Cambridge University Press, vol. 50(03), pages 541-567, September.
    5. Cowan, Robin, 1991. "Tortoises and Hares: Choice among Technologies of Unknown Merit," Economic Journal, Royal Economic Society, vol. 101(407), pages 801-814, July.
    6. Bonaccorsi, Andrea & Rossi, Cristina, 2003. "Why Open Source software can succeed," Research Policy, Elsevier, vol. 32(7), pages 1243-1258, July.
    7. Dalle, Jean-Michel & Jullien, Nicolas, 2003. "'Libre' software: turning fads into institutions?," Research Policy, Elsevier, vol. 32(1), pages 1-11, January.
    8. Giampaolo Garzarelli & Roberto Galoppini, 2003. "Capability Coordination in Modular Organization: Voluntary FS/OSS Production and the Case of Debian GNU/Linux," Industrial Organization 0312005, EconWPA.
    9. Maureen Mckelvey, 2001. "The Economic Dynamics Of Software: Three Competing Business Models Exemplified Through Microsoft, Netscape And Linux," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(2-3), pages 199-236.
    10. Cowan, Robin & Harison, Elad, 2001. "Protecting the digital endeavour: prospects for intellectual property rights in the information society," Research Memorandum 027, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    11. Dahlander, Linus & Magnusson, Mats G., 2005. "Relationships between open source software companies and communities: Observations from Nordic firms," Research Policy, Elsevier, vol. 34(4), pages 481-493, May.
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    More about this item


    open source; software market; innovative business strategies;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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