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- Title
Open Source Software and Firm Productivity.
- Authors
Nagle, Frank
- Abstract
As open source software (OSS) is increasingly used as a key input by firms, understanding its impact on productivity becomes critical. This study measures the firm-level productivity impact of nonpecuniary (free) OSS and finds a positive and significant value-added return for firms that have an ecosystem of complementary capabilities. There is no such impact for firms without this ecosystem of complements. Dynamic panel analysis, instrumental variables, and a variety of robustness checks are used to address measurement error concerns and to add support for a more causal interpretation of the results. For firms with an ecosystem of complements, a 1% increase in the use of nonpecuniary OSS leads to an increase in value-added productivity of between 0.002% and 0.008%. This effect is smaller for larger firms, and the results indicate that prior research underestimates the amount of IT firms use. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2977. This paper was accepted by Chris Forman, information systems.
- Subjects
OPEN source software; INDUSTRIAL productivity; PANEL analysis; MARKET value added; INFORMATION technology
- Publication
Management Science, 2019, Vol 65, Issue 3, p1191
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.2017.2977