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Abstract
In this paper, the authors analyze the differences in piracy rates from one country to another. Like previous papers on the topic, they find that more developed countries have lower incentives for pirating. Unlike previous papers, they find that the piracy rate is positively correlated with the tax burden rate but negatively correlated with the domestic market size and exports over GDP. The authors also separate the impacts of education and R&D on piracy, and find two effects with opposite signs. Moreover, they find that those countries with smaller, more efficient bureaucracies are likely to protect intellectual property more effectively. Finally, they show that the spread of access to the Internet is negatively correlated with the software piracy rate.
JEL K42 L86 O3 O57
Keywords Piracy rate; education; R&D ; quality bureaucracies; intellectual property; Internet
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1 Introduction
The software piracy rate measures the ratio of the value of unlicensed software to the total market value of software. In this paper we set out to find the causes for the differences in the software piracy rate from one country to another.1 This kind of analysis is very important given the negative effects of piracy on economic growth (Andrés and Goel, 2012) and industry profits (Gomes et al., 2015). We contribute to the existing literature by using the most recent available piracy data from the latest Global Software Survey provided by the Bussiness Software Alliance (2014) for 111 countries and 7 years, and by building a panel with data from the Global Competitiveness Index data platform (CGI) of the World Economic Forum (2014), that both provides its own data and collects data from other platforms such as the World Bank or UNESCO among others. Using these data, we build a model to assess the explanatory power of different factors that have been proposed in the relevant literature using model-selection techniques.
Software piracy rates across countries have been widely analysed in economic literature.2 Thus, we know that one of the main factors that explain the differences in software piracy rates from one country to another is the national income per capita: countries with lower incomes per capita have higher piracy rates (Marron and Steel, 2000; Husted, 2000). This result has been...