When does community participation enhance the performance of open source software companies?

This study examined how the participation in open innovation communities influences the innovative and financial performance of software firms pursuing open business models. Using an original dataset of open source companies in the Netherlands, I found that the participation-performance relationship is curvilinear. In addition, results indicate that extensive participation open source projects is more strongly related to performance for firms that also engage in social ("offline") community activities, for companies of larger size, and for firms with strong internal R&D resources. Overall, this research refines our understanding of the boundary conditions under which engagement in community-based innovation yields private returns to commercial actors.