Putting a value on openness: The effect of product source code releases on the market value of firms

Oliver Alexy

doi:10.5465/ambpp.2008.33661230

Putting a value on openness: The effect of product source code releases on the market value of firms

Oliver Alexy

Associate Professorship of Innovation and Organization Design

Research output: Contribution to conference › Paper › peer-review

3 Scopus citations

Abstract

This study examines the effect of opening up the innovation process on the market value of firms. Using the example of firms releasing proprietary software as open source in a sample of 30 software companies in the time span from 1999 to 2007, I find that market valuation is strongly influenced by the business model firms choose to generate and appropriate value. The non-existence of an explicit revenue model is punished by the capital market while firms whose efforts include an explicit revenue model achieve a premium on their stock price, confirming the potential for value-creation of open innovation efforts.

Original language	English
DOIs	https://doi.org/10.5465/ambpp.2008.33661230
State	Published - 2008
Event	68th Annual Meeting of the Academy of Management, AOM 2008 - Anaheim, CA, United States Duration: 8 Aug 2008 → 13 Aug 2008

Conference

Conference	68th Annual Meeting of the Academy of Management, AOM 2008
Country/Territory	United States
City	Anaheim, CA
Period	8/08/08 → 13/08/08

Keywords

Business model
Open innovation
Open source software

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10.5465/ambpp.2008.33661230

Cite this

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abstract = "This study examines the effect of opening up the innovation process on the market value of firms. Using the example of firms releasing proprietary software as open source in a sample of 30 software companies in the time span from 1999 to 2007, I find that market valuation is strongly influenced by the business model firms choose to generate and appropriate value. The non-existence of an explicit revenue model is punished by the capital market while firms whose efforts include an explicit revenue model achieve a premium on their stock price, confirming the potential for value-creation of open innovation efforts.",

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AB - This study examines the effect of opening up the innovation process on the market value of firms. Using the example of firms releasing proprietary software as open source in a sample of 30 software companies in the time span from 1999 to 2007, I find that market valuation is strongly influenced by the business model firms choose to generate and appropriate value. The non-existence of an explicit revenue model is punished by the capital market while firms whose efforts include an explicit revenue model achieve a premium on their stock price, confirming the potential for value-creation of open innovation efforts.

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KW - Open innovation

KW - Open source software

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Putting a value on openness: The effect of product source code releases on the market value of firms

Abstract

Conference

Keywords

Access to Document

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