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Globalization and software piracy within and across 103 countries

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Abstract

Globalization has been linked with many social problems, though little research has examined its relationship with software piracy. The ramifications of software piracy may vary across countries leading to varied criminal justice responses. More developed countries, which produce the most software and stand to gain the most from its protection, use diplomatic leverage to strengthen piracy laws in less developed countries. Consequently, lesser-developed countries are forced to adopt rigorous policies for IP protection. As such, we hypothesize that globalization will decrease software piracy rates over time. Using a modified random effect model, the current study examines the within and between countries effects of globalization on software piracy rates over time in 103 countries across a period of 14 years. Results indicate that globalization is significantly associated with a decrease in software piracy within and between countries over time while controlling for important time-varying and time invariant predictors. Interaction effects suggest that the relationship between globalization and software piracy is less pronounced in Asian countries and more pronounced in Latin American countries. In sum, some crimes, like software piracy, may be deterred if there are strong enough incentives and international pressures to regulate such crime through legislative and policy reforms.

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Notes

  1. These variables also include time-varying covariates (e.g., R&D expenditure, HDI index) that are treated as time-stable covariates in the analysis because they are measured only once during the study period.

  2. Since fixed-effects models estimate αi for each unit to explicitly control for unobserved heterogeneity biases, there is a substantial loss of degrees of freedom (NT – N – k instead of NT – k, where N represents the number of units, T represents the number of time periods, and k represents the number of regressors in the equation), which in turn increases the standard errors of the estimators. By assuming that αi is uncorrelated with one or more of the xitj in all time periods, random-effects models simply estimate the standard deviation of the αi and save many degrees of freedom.

  3. Such a non-significant finding might result from the fact that the polity scores remained relatively stable and even time-invariant for many countries during the study period.

  4. The interaction terms are introduced to the model 3 one at a time, but the results are reported all together in model 4 for the interest of parsimony. The coefficient and significance of the main effects are almost identical to those of model 3 when each interaction term is introduced.

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Authors and Affiliations

  1. Department of Criminal Justice, State University of New York, Oswego, NY, USA

    Margaret A. Schmuhl

  2. Department of Criminal Justice, John Jay College, CUNY, New York City, NY, USA

    Chongmin Na

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  1. Margaret A. Schmuhl
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Schmuhl, M.A., Na, C. Globalization and software piracy within and across 103 countries. Crime Law Soc Change 72, 249–267 (2019). https://doi.org/10.1007/s10611-018-9805-8

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