Abstract:

Piracy has become one of the major concerns of software companies since it has damaged the revenue of software industry. This problem, which is a crucial IT management and governance theme – software piracy governance, receives more and more attention from academics. In some developing countries (i.e. emerging markets), the piracy rate is notoriously high. Anti-piracy policies are not fully executed as the government anticipates that anti-piracy actions could not improve social welfare in the short run. In some emerging markets (e.g. China), software used to be a tariff-free product due to its intangibility. This paper develops an economic model to show that governments of emerging markets should consider imposing tariffs on foreign software in a bid to strengthen the execution of anti-piracy policies, which is essentially crucial for welfare of the society. This study contributes to IT management and governance domain by exploring the software piracy management topic in developing and emerging markets. The practical implication is to assist the decision makers to devise policy concerning on software piracy.