Seminar in International Economics: The geography of production and sourcing in the weightless economy: Evidence from open-source software

The Competence Centre for International Economics Research (FIW) kindly invites to participate in the Seminar in International Economics on the topic

The geography of production and sourcing in the weightless economy: Evidence from open-source software

Presenter: Gábor Békés (Central European University)
Discussant: Thi Thanh Ha Doan (Economic Research Institute for ASEAN and East Asia)

Abstract:
Trade costs, broadly defined, limit interaction between far-away economic agents and motivate them to concentrate in close proximity to one another. The gravity equation, which assigns a large role for geographic distance as a determinant of trade costs, has been remarkably successful in explaining patterns of international and international goods trade between firms, services trade, individual mobility and migration, and even scientific collaboration. It is unclear, however, why distance is relevant for sectors in which direct trade costs are zero. We study patterns of interaction when the good in question is ‘weightless’ using data from the open-source software industry. We find that importing other software packages as dependencies is at most weakly correlated with distance. By contrast, collaboration between different developers on the same piece of software is strongly decaying with distance. These results suggest that geography continues to matter for goods and services where collaboration is frequent and deep.

The presentation if available, will be posted after the event.

The seminar series is organised by the Vienna Institute for International Economic Studies (wiiw) in co-operation with FIW and the European University Institute. The seminar provides a forum for presentation and discussion of recent academic research in the field of international economics.