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Software development and Trade

By Larry D. Qiu


We develop a model to study the implications of a legal environment on software development and international trade. We show that the degree of contract enforcement affects the organizational mode (i.e., in-house or outsourcing) of customized software development. In autarky, a country with weak copyright protection develops customized software only, while a country with strong copyright protection develops both customized software and packaged software. After opening to trade, the strong-copyright-protecting country exports packaged software and the weak-copyright-protecting country exports customized software

Topics: software, piracy, copyright protection, contract enforcement
Year: 2000
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