Open source software (OSS) development as an inexpensive process to develop software threatens proprietary software business strategies. Providing business strategy to benefit from volunteer developers for the purpose of contributing to existing projects, as well as initiating new OSS projects is of utmost significance for companies in that industry. Therefore, it is important to figure out how groups of volunteer developers are formed as new developers join existing projects, and it is even more important to investigate what causes these developers to initiate new projects. The authors investigate network structure as a causal factor for both new project initiation within a group (representing group innovation) as well as new developers joining existing projects within a group (representing group growth). The authors develop four hypotheses:
1. Intra-group coupling has a positive impact on group growth,
2. Inter-group coupling has a positive impact on group innovation,
3. Inter-group structural hole has a positive impact on group innovation,
4. There is a trade-off between the effects of inter-group structural hole and inter-group coupling on group innovation.
The authors test these four hypotheses using data from OSS. Developers contributing to project tasks in groups other than their own can explore novel ideas for new project creation, because they can benefit from sharing knowledge, whereas developers contributing to project tasks inside their own group exploit ideas to improve those existing projects with better inside-group search possibility; and this demands more developers to join those group projects.