Spatial Proximity and Intercompany Communication: Myths and Realities

Abstract

Spatial proximity is credited with numerous virtues in the economic literature. In particular, for a company to be located near other companies is seen as conducive to the development of business relations. Spatial proximity is also considered to contribute to the quality and efficiency of these relations by facilitating face-to-face meetings that foster the exchange of complex knowledge and, in particular, the emergence of innovation. This article explores the notion of spatial proximity in intercompany relations, its capacity to facilitate exchange, as well as the link with the methods of communication employed (information and communication technologies and face-to-face). It is based on a distinction between real proximity (the spatial distance between firms), perceived proximity (the spatial distance as evaluated by the firm itself) and active proximity (spatial proximity that facilitates the exchanges). The data come from a survey conducted in 2008 with more than 2000 firms located in the Brittany region (France). The findings emphasize the relative nature of the notion of spatial proximity and the distinction in some cases between real and active proximities, and show that the positive perception of the role of spatial proximity is sustained by the increased face-to-face contact it entails.