Going public and employee innovation: Evidence from open source

Publication Type

Conference Proceeding Article

Publication Date

8-2024

Abstract

While a prominent stream of research has studied how going public affects firm innovation, research on how it affects firm employees’ innovation activity remains scant. We address this gap by examining how going public affects where employees’ innovation activity is being directed—toward their firm’s projects (internal innovation) versus external entities’ projects (external innovation)—post-IPO, and the mechanisms driving such changes. Applying an instrumented difference-in-differences technique to granular, activity-level data on employees’ contribution to their firms’ open source software projects and to the projects of other entities pre- and post-IPO, we show that going public decreases employees’ internal innovation activity but increases their external innovation activity. Further, these effects are moderated by employees’ internal and external collaboration ties, and are mainly driven by those who eventually depart the firm post-IPO. However, open source contribution from third-party nonemployee developers to the firm increases post-IPO, which may compensate for the reduced internal innovation by firm employees.

Discipline

Strategic Management Policy | Technology and Innovation

Research Areas

Intelligent Systems and Optimization

Publication

Proceedings of the 84th Annual Meeting of the Academy of Management (AOM 2024), Chicago, Illinois, August 9-13

Identifier

10.5465/AMPROC.2024.304bp

Publisher

AOM

City or Country

Chicago

Comments

This paper was also presented at the 2024 Global Entrepreneurship and Innovation Research Conference (Boulder, USA), and the Strategic Management Society Annual Conference (Toronto, Canada, 2023).

Additional URL

https://doi.org/10.5465/AMPROC.2024.304bp

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