Is there a software Kuznets curve?

Abstract

This study investigates the effect of the per capita income, national culture, quality of governance, education, informal market and corruption on the level of software piracy across 61 countries over a 4-year period (1996, 1998, 2000, 2002). Cross-country regressions as well as panel data analysis show that there is an inverted U-shaped relation between the per capita income and software piracy, very similar to the one described by the Environmental Kuznets Curve (EKC). We address this relation as the Software Kuznets Curve (SKC) and we find that our results are robust to the inclusion of the aforementioned variables. Moreover, the choice of a random or fixed effects model does not seem to affect these findings. We have also tried to relax the homogeneity assumption, by grouping the countries of our sample to classes, according to an indicator of well-being, namely the Human Development Index (HDI).

Keywords:

• software piracy
• Kuznets curve
• per capita income
• Human Development Index

JEL Classification:

• C21
• C23

Notes

¹The results are available upon request from the authors.