Sponsorship Funding in Open-Source Software: Effort Reallocation and Spillover Effects in Knowledge-Sharing Ecosystems

Poonacha K. Medappa, Murat M Tunc and Xitong Li
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Poonacha K. Medappa: Tilburg University
Murat M Tunc: Tilburg University
Xitong Li: HEC Paris

No 1485, HEC Research Papers Series from HEC Paris

Abstract: This study investigates the effects of sponsorship-based funding on open-source software contributors' behavior. We examine how sponsorship impacts contributors' creation and maintenance activities on the host platform where funding is received, as well as the spillover effects on a complementary knowledge-sharing platform. While sponsorship is expected to increase overall effort, its effects on different contribution types and spillover to other platforms remain unclear. To address these questions, we analyze the impact of Github's sponsorship feature, introduced in 2019, on contribution behavior. Using individual-level panel data from both the host platform (Github or GH) and the complementary platform (Stack Overflow or SO), we employ a difference-in-differences estimation methodology. Our findings reveal that sponsorship funding increases maintenance-related activities (e.g., pull request reviews) while leaving creation activities (e.g., pull requests) unaffected, indicating an effort reallocation effect. Moreover, we observe a negative spillover on knowledge-sharing activities on SO, suggesting an effort distortion effect. Interestingly, this negative spillover is limited to knowledge-creation activities (e.g., answers and questions), while maintenance-related activities (e.g., edits and reviews) remain unaffected, evidence of an effort mirroring effect. We attribute these findings to motivational differences between creation and maintenance activities. Sponsorship funding appears to boost less rewarding activities such as maintenance of software, while intrinsically motivated creation activities remain largely unaffected. We further investigate the underlying mechanisms and observe a crowding-out effect on creation activities for contributors who are more involved with the OSS community. Our findings provide empirical evidence that sponsorship funding can be a powerful tool to incentivize maintenance-related activities in open-source software.

Keywords: Github sponsors; open-source software; creation (maintenance) activity; knowledge-sharing platforms; Stack Overflow; spillover effect; crowding out; difference-in-differences (search for similar items in EconPapers)
JEL-codes: L17 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2023-06-25
New Economics Papers: this item is included in nep-knm
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1485

DOI: 10.2139/ssrn.4484403

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