Open Source Software and Global Entrepreneurship: A Virtuous Cycle

We consider the relationship between open source software (OSS) and entrepreneurship around the globe. This study measures how country-level participation on the GitHub OSS platform affects the founding of innovative ventures globally, and subsequently, how new venture formation affects OSS contributions. We estimate these effects using cross-country variation in new venture founding and OSS participation. The study finds that an increase in GitHub “commits” from people residing in a given country generates an increase in the number of new technology ventures within that country. This holds particularly for contributions of code from those not affiliated with an organizational account, and for globally-oriented, mission-oriented, and high-quality ventures. The reverse relationship also holds more weakly: an increase in the founding of new IT ventures generates an increase in OSS commits for only globally-oriented and high-quality entrepreneurship. Together, the results suggest a virtuous cycle between OSS and entrepreneurship in some but not all settings. Policymakers may utilize OSS as a lever to stimulate innovative entrepreneurial ecosystems, and investors may use OSS as an early indicator of high-quality entrepreneurial activity across geographies.