ICT Intensity of Use and the Geography of Firms

Abstract

This paper investigates the relationship between the geography of firms and the intensity of use of information and communication technologies (ICTs). Our approach to the geography of firms is multifaceted, in relation to the various characteristics of their location area(s), to their organisational fragmentation, and to their spatial organisation at a national scale. Making use of a single cross-section dataset drawn from the ‘ICT and e-commerce’ survey for the French industry, we examine firms' decisions to use the Internet more or less intensively. We find that firms' internal fragmentation lead to important variations in the intensity of Internet use. Moreover, we find that firms benefit from urbanisation economies through the location of their headquarters and also through that of their units in the case of multiunit firms. Finally, we observe a strong positive effect of competitive pressure at both national and international levels as well as geographical and sectoral epidemic effects on the intrafirm diffusion of the Internet.