Open Source Software and Global Entrepreneurship

Does more activity in open source lead to more entrepreneurial activity and, if so, how much, and in what direction? This study measures how participation on the GitHub open source platform affects the founding of new ventures globally. We estimate these effects using cross-country variation in new venture foundings and open source participation. The study finds that a 1 percent increase in GitHub commits (code contributions) from people residing in a given country generates a 0.1-0.5 percent increase in the number of technology ventures founded within that country, a 0.6 percent increase in the number of new financing deals, a 0.97 percent increase in financing value, a 0.3 percent increase in the number of technology acquisitions, and a 0.1-0.5 percent increase in the number of global and mission-oriented ventures. The analysis develops an approach to identification based on various instrumental variables and shows that these associations can support causal inferences. We conclude that open source software contributes to different rates of entrepreneurship around the world and therefore can act as a policy lever to improve economic development and can also indicate promising investment opportunities.