Publications
Publications
- 2024
- HBS Working Paper Series
Contributing to Growth? The Role of Open Source Software for Global Startups
By: Nataliya Langburd Wright, Frank Nagle and Shane Greenstein
Abstract
Does participating in open source software (OSS) communities spur entrepreneurial growth? More
efficiently developing shared code, learning from what the OSS community has developed, and
shaping the direction of massive projects, such as those linked to frameworks for AI algorithms,
attract many participants. Yet, contributing valuable resources to OSS, such as time and code,
might give away too much, making it more difficult for firms to appropriate value from
innovations. To gain a deeper understanding of participation, we analyze novel data matching
accounts from GitHub—the largest OSS hosting platform— to the universe of global software
venture-backed firms identified by PitchBook. We find a robustly positive relationship between
OSS contributions and entrepreneurial growth, driven by both selection and treatment effects. The
treatment effects account for roughly one-third of the overall impact: firms that increase GitHub
contributions—in terms of the number of lines of code and number of users contributing—see an
increase in their valuation and funding. Human capital, OSS policies, and market size moderate
the statistical relationship between contributing to OSS and valuations, suggesting that OSS
complements supply-side and demand-side country endowments. This research reveals that
contributing to OSS can lead to entrepreneurial growth worldwide, with implications for policy
and entrepreneurial strategy.
Keywords
Applications and Software; Open Source Distribution; Entrepreneurship; Business Growth and Maturation; Human Capital; Valuation; Corporate Strategy
Citation
Wright, Nataliya Langburd, Frank Nagle, and Shane Greenstein. "Contributing to Growth? The Role of Open Source Software for Global Startups." Harvard Business School Working Paper, No. 24-040, January 2024.