Is distance dead? Face-to-face communication and productivity in teams
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.
30 March 2017 Paper Number CEPDP1473
This CEP discussion paper is published under the centre's Growth programme.