Flourish or Perish? The Impact of Technological Acquisitions on Contributions to Open-Source Software

48 Pages Posted: 1 Jul 2018 Last revised: 24 Oct 2020

See all articles by Wei Chen

Wei Chen

University of Arizona - Eller College of Management

Fujie Jin

Kelley School of Business, Indiana University

Ling Xue

Georgia State University

Date Written: June 12, 2018

Abstract

This study investigates the impact of technological acquisitions on contributions to firm-sponsored open-source software (OSS). We distinguish between internal contributors affiliated with target firms and external contributors from the community, and examine how they adjust and shift their contribution efforts as a response to technological acquisitions. Our findings reveal that acquisitions make external contributors more active both in contributing to target firms’ sponsored projects and in contributing to other projects in the community. While internal contributors reduce contributions to target firms' sponsored projects after acquisitions, they become more active in contributing to other projects in the OSS community. Therefore, our study illustrates how technological acquisitions can potentially benefit the whole OSS community by motivating contributors to reallocate development efforts. We also find that when the acquirer’s OSS experience and the project similarity between the acquirer and the target motivate both external and internal contributors to shift more of their development efforts to the acquirer's OSS projects. The implication is that the signaling effect and the synergy potential in technological acquisitions can also benefit the acquirer's own projects within the OSS community. Taken together, by diving in more granular details of OSS contribution activities, our study improves the understanding of the impacts of technological acquisitions on innovation in the OSS context.

Keywords: Open-Source Software, Technological Acquisitions, Internal Contributions, External contributions, Openness, Difference-in-difference

JEL Classification: G34, L17, L86, O31, O36

Suggested Citation

Chen, Wei and Jin, Fujie and Xue, Ling, Flourish or Perish? The Impact of Technological Acquisitions on Contributions to Open-Source Software (June 12, 2018). Kelley School of Business Research Paper No. 18-55, Available at SSRN: https://ssrn.com/abstract=3197897 or http://dx.doi.org/10.2139/ssrn.3197897

Wei Chen (Contact Author)

University of Arizona - Eller College of Management ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

Fujie Jin

Kelley School of Business, Indiana University ( email )

Business 670
1309 E. Tenth Street
Bloomington, IN 47401
United States
812-855-0943 (Phone)

HOME PAGE: http://https://kelley.iu.edu/facultyglobal/directory/FacultyProfile.cfm?netID=jinf

Ling Xue

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

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