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ResearchFebruary 10, 2014

Business visits increase productivity

According to the International Air Transport Association, each year several hundred million workers carry out an international business trip, that is, a work-related visit in another country lasting only a few days. One intriguing feature of this labor flow is the almost exact correspondence between the characteristics of those who depart and those who arrive. In fact, for any pair of cities connected by air travel the volume, industry, occupational and demographic structure of out-going business visitors are almost indistinguishable from those of the corresponding incoming flow.

A recent paper by Roselyne Joyeux and Massimiliano Tani indicates that business visits cause productivity improvements, especially in industries considered as strategic for technological and communication advancements. In the study, the authors analyze data on business expenditures and productivity covering 30 sectors and 17 countries from 1998 to 2007. The authors find the highest productivity effect of business visits in research and development industries like optical equipment, chemicals, finance , primary industries, post and telecommunication services, and machinery.

Based on their results, Joyeux and Tani argue that international business visits should not be seen as a mere expenditure but as a channel for enhancing knowledge and productivity. The results of the study point to higher labor mobility as a potential effective source of economic growth. This has important implications for policymakers, as visits may enable a country to gain useful knowledge for its economic growth without either having to reproduce the conditions that led to such knowledge elsewhere, or having to physically ‘import’ people via temporary or permanent migration.

IZA Discussion Paper No. 7827 Do Business Visits Cause Productivity Growth? Massimiliano Tani, Roselyne Joyeux

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  • business visits
  • growths
  • knowledge transfer
  • labor
  • labor mobility
  • migration
  • productivity
  • Massimiliano Tani
  • Roselyne Joyeux
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