Opening in the enclosing era: Trade decoupling and corporate digital open-source strategy in China

Abstract

The impact of trade decoupling on the implementation of a digital open-source strategy among Chinese firms is explored in this paper. On the basis of a textual analysis approach to detect digital open sources, we find that trade decoupling, measured by the decline in overseas sales, is a threat that induces firms to proactively adopt a digital open-source strategy. This strategy is achieved through three channels: market pressure, financing pressure, and managerial pressure. We document that this positive effect is strengthened when firms are located in regions with advanced information and conventional technologies. Furthermore, implementing an open-source strategy facilitates corporate innovation and subsequent open-source contribution.