The relationship between copyright software protection and piracy: Evidence from europe

Abstract

This paper provides an empirical analysis of the relationship between software protection and national piracy rates across 23 European countries over a period of three years (1994, 1997, and 2000). The analysis not only constructs a new index of copyright software protection but remedies previous econometric and methodological shortcomings by applying a macro level panel data technique. Results indicate that copyright software protection and income are the most determinant factors of software piracy. In addition, the model predicts an inverted U relationship between piracy and per capita income. Moreover, the above findings are robust to the inclusion of other descriptors suggested by the empirical literature on piracy.