The hardships of long distance relationships: time zone proximity and the location of MNC's knowledge-intensive activities

Using a unique global dataset on multinational corporations (MNCs) with precise location of headquarters and affiliates, I present evidence of a trade-off between distance to the headquarters and knowledge intensity of the affiliates' economic activity. This trade-off is strongly diminished the higher the overlap in working hours between the headquarters and the affiliate. In order to rule out biases arising from confounding factors, I implement...