The global software production network

Can developing countries benefit from exporting opportunities in the growing sector of tradable services, given the near free information flow via the internet and wage differentials relative to developed countries? Focusing on the software development industry, we analyse data from 2.68 million software projects across 5200 locations, and estimate an economic geography model in which locations trade tasks. The results reveal three factors limiting exports: (i) significant productivity differences within and between countries; (ii) a notable decline in trade volumes with distance; (iii) sorting patterns among software developers that are suggestive of brain drain. • We study export opportunities in tradable services for developing countries. • Use data on 2.75M GitHub users across 5200 global locations. • Find large productivity differences within and between countries. • Document significant distance elasticities in services trade. • Uncover selective sorting among software developers resembling brain drain.