Open Source Collaboration in New Ventures
39 Pages Posted: 3 Dec 2020 Last revised: 23 Dec 2020
Date Written: October 1, 2020
Open source collaboration (OSC) platforms, such as GitHub, have emerged over the past decade to become a salient venue for organizing innovation efforts and output. As a result, an increasing number of entrepreneurial firms are collaborating with open communities on such platforms to develop and scale their new ventures. From the lens of open innovation, we examine value creation and value capture in high-tech startups’ external collaboration on OSC platforms. We develop a theoretical framework to explicate how the engagement in OSC may affect the value of startup firms and how the effect is contingent on the stage of venture maturity (conception, commercialization, or growth) and the mode of OSC engagement (inbound or outbound). In analyses that pool 22,896 matched startups with monthly panel observations between 2008 and 2017, we find a positive and significant value-added effect of OSC to startups, but the effect is sensitive to the stage of startup maturity and the mode of OSC engagement. In particular, startups in the conception and commercialization stages benefit more from inbound OSC whereas startups in the growth stage benefit more from outbound OSC. As startups increasingly rely on OSC platforms for organizing innovation, our contribution is to show whether, when, and how knowledge flows through startups’ OSC might affect the value of startup firms.
Keywords: open innovation, open source collaboration, value creation, value capture, entrepreneurship
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