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Cited by 46Copyright and Intellectual PropertyDigital Platforms and EconomicsIntellectual Property and Patents

Does piracy lead to product abandonment or stimulate new product development?: Evidence from mobile platform‐based developer firms

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Miric, Milan, Jeppesen, Lars Bo·2020·Strategic Management Journal
DOI 10.1002/smj.3208
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Abstract

Research Summary: With the growth of digital platforms, understanding the role of property rights on those platforms has become increasingly important. Digital piracy, the unauthorized copying and distribution of digital products, is therefore an important strategic issue, both because of lost revenues and because it is thought to decrease innovation. Yet, while the latter effect is often argued, empirical evidence is limited. We study whether piracy affects innovation and whether it leads firms to shift to different types of innovations. By studying a large piracy event in a mobile app marketplace, we find that piracy leads to a decrease in the release of incremental innovations, such as bug fixes, but does not decrease more substantial revisions. Additionally, it is associated with subsequent new product development. Managerial Abstract: For many platform companies, a critical issue is understanding how piracy and imitation should be regulated, motivated in part by a common narrative that piracy will eliminate innovation on these platforms. The present article suggests that these effects are slightly more nuanced. We find that piracy does lead to a decline in incremental innovations, such as bug fixes or appearance tweaks, but no discernible decline in more major innovations, such as feature updates or entirely new versions. This implies that piracy can shape the type of innovation, potentially leading to products that are less polished and refined but not affecting the overall level of innovation.

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  • In the context of digital piracy, unauthorized copying and distribution of digital products may cause severe damage to DPEs, diminishing overall revenues and hindering innovation.

    “Especially in the context of digital piracy, the unauthorized copying and distribution of digital products may cause severe damage to DPEs, diminishing overall revenues and hindering innovation (Miric & Jeppesen, 2020).”

    From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Miric & Jeppesen, 2020

  • Uncontrolled entry of low-quality complementors caused a negative effect on the ecosystems' overall innovation output.

    “In other empirical cases, uncontrolled entry of low-quality complementors caused a negative effect on the ecosystems' overall innovation output (Boudreau, 2012;Miric & Jeppesen, 2020).”

    From Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems (2023) · cites this paper as Miric & Jeppesen, 2020

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Authors
Miric, M., & Jeppesen, L. B.
Affiliations
  • University of Southern California (US)
  • Copenhagen Business School (DK)
Corresponding author
  • Miric, Milan
  • Jeppesen, Lars Bo
ORCID
Venue
Strategic Management Journal
Publisher
Wiley
Published
2020-08-02
Volume
41
Issue
12
Pages
2155-2184
ISSN
  • 0143-2095 (ISSN-L)
  • 1097-0266
DOI
10.1002/smj.3208
OpenAlex
W3035219876
Cited by
46
References
86
Citations by year
2026: 6 · 2025: 5 · 2024: 12 · 2023: 9 · 2022: 6 · 2021: 5 · 2020: 1 · 2019: 1 · 2017: 1
FWCI
5.41
Type
journal article
Language
en
Open access
Licence
onlinelibrary.wiley.com/termsAndConditions#vor (vor)
Locations
  • Strategic Management Journal (publishedVersion)
  • SSRN Electronic Journal (submittedVersion)
  • CBS Research Portal (Copenhagen Business School) (submittedVersion, other-oa)
Topics
  • Social Sciences › Business, Management and Accounting › Marketing › Copyright and Intellectual Property
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
  • Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Intellectual Property and Patents
Keywords
digital piracy, innovation, new product development, property rights, incremental innovation, software updates, digital platforms, imitation

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