The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time

58 Pages Posted: 14 Oct 2020

See all articles by Jasmina Chauvin

Jasmina Chauvin

Georgetown University

Prithwiraj Choudhury

Harvard University - Business School (HBS)

Tommy Pan Fang

Harvard University

Date Written: September 23, 2020

Abstract

Cross-border communication costs have plummeted and enabled the global distribution of work, but frictions attributable to distance persist. We estimate the causal effects of temporal distance stemming from time zone differences on intra-firm communication. We argue that temporal distance reduces synchronous and impromptu communication from first-best levels, and presents an especially costly friction for knowledge-intensive work. Exploiting detailed data from a large multinational firm and discrete changes in temporal distance due to shifts to and from Daylight Savings Time, we show that office pairs that lose one or two shared business hours due to DST reduce their total communication volumes by 9.2 percent on average from baseline levels, an effect driven by decreases in scheduled calls & meetings (-10.7 percent) and in instant-message chat volumes (-8.7 percent). When office pairs gain one or two shared business hours, volumes of unscheduled calls increase (+17.6 percent). Volumes of asynchronous communication (e-mail), in contrast, show no significant responses to changes in temporal distance. Examining heterogeneity by employee function, we find evidence that the shadow value of additional shared time is higher for knowledge-intensive (R&D and IT) employees than for production employees. Finally, using communication time stamps, we show that greater temporal distance leads to more work being shifted into leisure time; however, such adjustments do not fully offset lost communication during business hours. We discuss the implications of our findings for distributed work and for firms’ spatial organization.

Keywords: communication patterns, time zones, geographic frictions, knowledge workers, multinational companies

Suggested Citation

Chauvin, Jasmina and Choudhury, Prithwiraj and Fang, Tommy Pan, The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time (September 23, 2020). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 21-052, Available at SSRN: https://ssrn.com/abstract=3710778 or http://dx.doi.org/10.2139/ssrn.3710778

Jasmina Chauvin

Georgetown University ( email )

3700 O Street, NW
Washington, DC 20057
United States

Prithwiraj Choudhury (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Tommy Pan Fang

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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