They have been proven multiple times to significantly decrease productivity but they are cheaper to build. Visual and sound distractions break up concentration when you are tying to work.

I had one place that insisted on an open office with these these torture style "ergonomic" chairs. I hated the setup so did some sleuthing. The chair model was discontinued because they sucked and the company got them on a steep discount. The "open office" desks where 1/8 the price of a traditional cubical setup.