Learning By Contributing: Gaining Competitive Advantage Through Cooperative Contribution to Public Goods

As the economy increasingly becomes more information-based, firms must enhance their capability to productively use public information goods. Counterintuitively, some firms pay their employees to contribute to the creation of... [ view full abstract ]

As the economy increasingly becomes more information-based, firms must enhance their capability to productively use public information goods. Counterintuitively, some firms pay their employees to contribute to the creation of these goods, which can be used freely by their competitors. One possible explanation for this behavior is that contributing to public goods allows the firm to learn how to better capture value from them. This study explores this mechanism using data on firm contributions to open source software (OSS), an important public information good. Using matching and dynamic panel analysis to address endogeneity concerns, this study shows that contributing firms capture 11% more productive value from usage of OSS than their free-riding peers. Further, the learning obtained through this process has a spillover effect that allows contributors to capture more productive value from not only OSS, but also related internal assets.