Analyzing Software Piracy from Supply and Demand Factors

This study analyzes the competing roles of economic wealth and corruption on software piracy based on the supply-demand perspective. The study argues that even though greater economic wealth may encourage people to buy legal software instead of using pirated software, the ease of access to pirated copies in the open market as a result of corruption can have a stronger influence on the decision to use pirated software. The empirical results also reveal that while an increase in economic wealth can reduce software piracy, its effect tends to be moderated by the level of corruption in a country. These results indicate that a pricing strategy that makes software more affordable is not a sufficient policy for combating software piracy. Additional policies aimed at combating corruption should be implemented concomitantly for effective resolution of this problem.