DP11924 Is Distance Dead? Face-to-Face Communication and Productivity in Teams

Author(s): Diego Battiston, Jordi Blanes I Vidal, Tom Kirchmaier
Publication Date: March 2017
Keyword(s):
JEL(s): D23, M11
Programme Areas: Labour Economics, Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11924

Has technology made face-to-face communication redundant? We investigate using a natural experiment in an organisation where a worker must communicate complex electronic information to a colleague. Productivity is higher when the teammates are (exogenously) in the same room and, inside the room, when their desks are closer together. We establish face-to-face communication as the main mechanism, and rule out alternative channels such as higher effort by co-located workers. The effect is stronger for urgent and complex tasks, for homogeneous workers, and for high pressure conditions. We highlight the opportunity costs of face-to-face communication and their dependence on organisational slack.