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

Abstract

Cross-border communication costs have plummeted and enabled the global distribution of work; however, frictions attributable to distance persist. We shed light on the causal effects of temporal distance, i.e., time zone separation between employees, on intra-firm communication, a critical means of coordination and knowledge transfer. Exploiting Daylight Saving Time (DST) as a natural experiment and detailed data from a large global firm, we find that collaborators who experience a one-to-two-hour increase in temporal distance reduce total communication volumes by 9.4 percent on average, an effect fully driven by reductions in synchronous communication. However, we show that these declines are concentrated among employees performing routine tasks. Employees performing non-routine tasks, meanwhile, react to increased temporal distance by shifting synchronous communication across the boundary of the standard workday into personal time. This adjustment, however, occurs only among employees with the ability to work from home. Overall, our findings highlight temporal distance as a sizable friction with effects on synchronous communication and the nature of the employee workday. We draw implications for how temporal distance relates to organizational considerations such as the geographic distribution work and the temporal boundaries of the firm.