Is the French High Speed Rail network infrastructure a factor in competitiveness for enterprises?

Pauline Charnoz, Claire Lelarge et Corentin Trevien, division Marchés et entreprises, Insee

In France, companies or groups that are geographically dispersed across several production sites have a very substantial economic impact: in 2011, including subsidiaries of foreign groups, these structures employed 56% of the market sector payroll labour force (excluding agriculture and employees of private individuals).

By reducing travel time between their sites, transport infrastructure such as that for the high-speed rail network (TGV) could reduce management costs for these complex organisations. Margin rates and the level of productivity could be increased through organisational adjustments. When the travel time between headquarters and a remote site was reduced as a result of the extension of the TGV network between 1993 and 2011, enterprises or groups tended to reorganise: the labour force allocated to production activities in the remote sites was increased, to the detriment of managerial functions, which were partially transferred to headquarters.

The scale of these reallocations differed according to the business sector. In personal services, a site with access to the TGV reduces the share of managerial jobs in its total workforce by 2.7 percentage points. On the other hand, the share of production-related jobs increases by 3.0 points. Similar effects were seen in the transport sector, but effects were less pronounced in the other sectors. Along with this rationalisation process in organisation is a small but significant impact on the margin rate, usually between 0.6 to 0.8 points, depending on the business sector, and reaching 1.9 points in transport (for an average margin rate of 24% to 32%, depending on the sector).

Insee Analyses
No 31
Paru le : 06/02/2017