Open Source Software and Global Entrepreneurship

This is the first study to consider the relationship between open source software (OSS) and entrepreneurship around the globe. This study measures whether country-level participation on the GitHub OSS platform affects the founding of innovative ventures, and where it does so, for what types of ventures. We estimate these effects using cross-country variation in new venture founding and OSS participation. We propose an approach using instrumental variables, and cannot reject a causal interpretation. The study finds that an increase in GitHub participation in a given country generates an increase in the number of new technology ventures within that country in the subsequent year. The evidence suggests this relationship is complementary to a country’s endowments, and does not substitute for them. In addition to this positive change in the rate of entrepreneurship, we also find a change in direction – OSS contributions lead to new ventures that are more mission- and global-oriented and are of a higher quality. Together, the results suggest that OSS can boost entrepreneurial activity, albeit with a human capital prerequisite. We consider the implications for policies that encourage OSS as a lever for stimulating entrepreneurial growth.