To Develop or to Reuse? Two Perspectives on External Reuse in Software Projects

Using existing software components is a key factor when it comes to increasing productivity and improving the quality of software. It can be regarded as a mean to manage the increasing complexity of software, as software has become prevalent in most areas of our life. Thus, this study seeks to better understand the reuse of external software components. Based on two different theoretical lenses, non-rational effects on decision-making and the transaction cost theory, we analyze the degree of external reuse in software development projects. We tested our theoretical model empirically, with data collected in Germany. The empirical evidence is generally supportive of the theory with some exceptions. We find out that the not-invented-here bias plays the most important role in this strategic decision. Whereas, transaction cost constructs show mixed results. For example, technical uncertainty does not play a role, whereas business uncertainty positively influences the degree of external reuse.