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Workplace communication and productivity: direct effects and agglomeration externalities

Author

Listed:
  • Charlot, Sylvie
  • Duranton, Gilles

Abstract

The economic explanation of the spatial concentration of activities in cities is based in part on the assumption that there is a productivity gain linked to the greatest possibility of exchanging pertinent information face-to-face, without extra cost (especially transport) in places with a high population density. The measurement of these communication externalities, on the one hand, helps evaluate their effective impact on productivity, and on the other hand, understand the possible effects of the information and communication technologies (ICT) in terms of re-dispersion of activities towards rural areas. The indirect effects of the local environment (population size and local share of highly skilled employees) percolating through the intensity of communication represent about 22% of their direct effects, thereby confirming the assumption of agglomeration externality and strongly questioning the possibility of reorganizing activities towards rural areas, if only based on the development of ICT.

Suggested Citation

  • Charlot, Sylvie & Duranton, Gilles, 2006. "Workplace communication and productivity: direct effects and agglomeration externalities," INRAE Sciences Sociales, Institut national de recherche pour l'agriculture, l'alimentation et l'environnement (INRAE), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2), vol. 2006, pages 1-6, June.
    • Handle: RePEc:ags:inrass:157458
    DOI: 10.22004/ag.econ.157458
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