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Communication Costs and the Internal Organisation of Multi-Plant Businesses

Evidence From the Impact of the French High-Speed Rail

Bibliographic Data

ID9703816
AuthorsPauline Charnoz (DARES, Crest and RITM, Université Paris Sud, Université Paris Saclay), Claire Lelarge (Banque de France and CEPR), Corentin Trevien (Ensae and Crest)
Year2018
Volume128
Issue610
Pages949-994
Publication date2018-05-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12592
OpenAlexW2274354823
LanguageEN
Citations received26
References cited45

We take advantage of the expansion of the French High‐speed Rail to study the impact of decreases in communication costs in the form of lower travel times between headquarters and affiliated plants of corporate groups. We show that such shocks foster the functional specialisation of remote affiliates on their production activities. Support activities shrink because of the transfer of high‐skilled managers to headquarters. These organisational rationalisations have a significant but small impact on overall profit. Our results hold across all industries but are strongest in services where the information to be transmitted across sites is arguably softer

Business · Economics · Industrial organization · Microeconomics · Production (economics · Profit (economics · Aviation Industry Analysis and Trends · Merger and Competition Analysis · Transport and Economic Policies

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Unique citing works26
Citations per year3,71
Citation span2019 - 2026 (8)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 26

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