Jürgen Bitzer

Foreign Direct Investment, Competition and Industry Performance

This paper investigates the productivity effects of inward and outward foreign direct investment using industry- and country-level data for 17 OECD countries over the period 1973 to 2001. Controlling for national and international knowledge spillovers we argue that the effects of FDI work through direct compositional effects as well as changing competition in the host country. Our results show that there are, on average, productivity benefits from inward FDI, although we can identify a number of countries which, on aggregate, do not appear to benefit in terms of productivity. On the other hand, a countrys stock of outward FDI is, on average, negatively related to productivity. However, again there is substantial heterogeneity in the effect across OECD countries.

The Economics of Open Source Software Development

Publisher Summary This chapter introduces the fundamentals of Open Source Software (OSS), its nature, the central economic aspects and the key mechanisms of its development. It captures the most important lines of research dealing with the economics of OSS and its development. Research on these issues has made substantial progress in recent years, both in identifying particularities and in offering explanations for them. OSS is mainly programmed by volunteers who engage in such projects free of charge. The perplexing particularities such as volunteer programmers, free availability and the emergence of OSS-based for-profit firms create the backdrop for examining central research questions on the OSS phenomenon.. It discusses a primer on OSS and the surrounding development process including a sketch of how OSS-related activities actually generate revenues. The chapter addresses issues such as the motivation of for-profit firms in their participation in OSS, their relation to OSS communities, nature of sustainable OSS-based business models, and the innovation performance of OSS, addressing issues such as the innovation incentives for further developing an operating system or software applications for an operating system, and the impact of OSS competition on the willingness to innovate in software industries featuring highly concentrated market structures.

Bug-Fixing and Code-Writing: The Private Provision of Open Source Software

Open source software (OSS) is a public good. A self-interested individual would consider providing such software, if the benefits he gained from having it justified the cost of programming. Nevertheless each agent is tempted to free ride and wait for others to develop the software instead. This problem is modelled as a war of attrition with complete information, job signaling, repeated contribution to the public good and uncertainty in programming. The resulting game does not feature any delay: software will be provided swiftly, by young, low-cost individuals who gain considerably by signaling their programming skills; the startup (and collapse) of an OSS project displays bandwagon dynamics.

Productivity Spillovers through Vertical Linkages: Evidence from 17 OECD Countries

We use industry-level data for OECD countries and investigate the importance of horizontal and vertical spillovers from multinationals. There is evidence for spillovers through backward linkages for all countries. This effect is much higher for CEEC than other OECD countries.

The Impact of Entry and Competition by Open Source Software on Innovation Activity

This paper presents the stylized facts of open source software innovation and provides empirical evidence on the impact of increased competition by OSS on the innovative activity in the software industry. Furthermore, we introduce a simple formal model that captures the innovation impact of OSS entry by examining a change in market structure from monopoly to duopoly under the assumption that software producers compete in technology rather than price or quantities. The paper identifies a pro-innovative effect of OSS competition.

Open Source Software, Competition and Innovation

The entry and success of open source software (OSS), for example, Linuxs entry into the operating systems market, has fundamentally changed industry structures in the software business. In this paper we explore the process of OSS innovation and highlight the impact of increased competition and different cost structures on innovative activity in the industry, which has been neglected in the literature thus far. In a simple model, we formalize the innovation impact of OSS entry by examining a change in market structure from monopoly to duopoly under the assumption that software producers compete in technology rather than price or quantities. The model takes into account development costs and total cost of ownership, whereby the latter captures items such as network externalities. The paper identifies a pro‐innovative effect of both intra‐OSS and extra‐OSS competition.

Measuring Capital Services by Energy Use: An Empirical Comparative Study

ABSTRACT From an engineering perspective, the service that a capital good provides is energy conversion – that is, the physical ‘work’ done by a machine. A capital good’s service can thus be measured directly by the energy consumed in production. We show important empirical advantages of this approximation over traditional measures. The empirical application reveals that this approach avoids a number of conceptual problems of the latter. Furthermore, this measure captures the utilization of the capital stock more accurately as it is more sensitive to fluctuations in economic activity. With a growth accounting exercise, it is shown that the differences between the new and the traditional measures are important for empirical work. Using the new measure yields significantly different results. Especially in times of global recession it provides higher and more feasible total factor productivity growth rates.

Can Trade Really Hurt? An Empirical Follow‐Up on Samuelson's Controversial Paper

This paper investigates Samuelsons (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for situations with outward knowledge spillovers. Within this framework Samuelsons Act II effects may occur. Based on industry level panel data for seventeen OECD countries for the period 1973 to 2000 we show econometrically that the outflow of domestic knowledge via exports or FDI may have a negative impact on industry output in the home country. This is particularly so when exporting to technologically less advanced countries and, more specifically, China.

Is there a wage premium for volunteer OSS engagement? – signalling, learning and noise

ABSTRACT Volunteer-based open-source production has become a significant new model for the organization of software development. Economics often pictures this phenomenon as a case of signalling: individuals engage in the volunteer programming of open-source software (OSS) as a labour-market signal resulting in a wage premium. Yet, this explanation could so far not be empirically tested. This article fills this gap by estimating an upper-bound composite wage premium of voluntary OSS contributions and by separating the potential signalling effect of OSS engagement from other effects. Although some 70% of OSS contributors believe that OSS involvement benefits their careers, we find no actual labour-market premium for OSS engagement. The presence of other motives, such as fun of play or altruism, renders OSS contributions too noisy to function as a signal.