This article examines the relationship between Hofstede’s national culture indices (IDV, PSI, MAS, and UAI), economic wealth (GNI), and national software piracy rates (SPR). Although a number of studies have already examined this relationship, the contribution of this article is two-fold. First, we develop a path model that highlights not only the key factors that promote software piracy, but also the inter-relationships between these factors. Second, most studies have used the dataset from the pre-2003 methodology which only accounted for business software and did not take into account local market conditions. Using the latest dataset and a large sample of countries (n=61) we find there is an important triadic relationship between PDI, IDV, and GNI that explains over 80% of the variance in software piracy rates. Implications for combating software piracy are discussed.
TopTheoretical Background
Software is treated as an original work of authorship and, along with literary, musical, audio-visual, and artistic work, is protected by intellectual property rights (IPR) legislation in most countries around the world. Within the US, the main IPR legislation is the Copyright Act of 1976, which has been extended by the Digital Millennium Copyright Act (DMCA) of 1998. The DCMA implemented the provisions of the World Intellectual Property Organization (WIPO) Copyright Treaty of 1996, which now has more than 50 signatory countries. Software piracy, then, involves the copying, distribution, or sale of commercial software in violation of the end user license agreement (EULA) that comes with each piece of commercial software. In practice, this means making a copy of a commercial piece of software (say, Microsoft Office 2007), and giving or selling a copy to someone else.
An accurate measure of the level of software piracy in each country would be almost impossible to determine, given that it would require a count of the number of applications being packaged and sold by criminal gangs, as well as the number being shared amongst family and friends. As such, vendor organizations such as the Business Software Alliance (BSA) estimate the levels of piracy by assuming that for each personal computer sold, a certain amount of software will also be sold. Information about computer and software sales in provided by BSA member companies, such as Adobe, Dell, HP, IBM, and Microsoft