Companies often assign workers to far-flung locations to fill critical roles and to develop human capital. Yet little is known about how workers perform in assignments to locations far from their hometowns, which may subject them to increased cultural distance, information costs, and effects related to social attachment to hometown/workplace. By exploiting an Indian technology firm’s policy of randomly assigning entry-level employees to eight widely scattered locations, we empirically assess how distance from hometown affects workers’ performance. Our results suggest that distance from hometown has a positive effect on worker performance in the short term and a negative effect over the longer term. We offer evidence on a key mechanism: how employees allocate their time to work-related activities and to visiting distant family. To do so, we use field interviews, sub-sample analyses, and micro-data on the number of optional skill-development courses employees complete and on leave taken during the major Indian festival of Diwali. We find evidence of heterogenous effects based on the location of the production center and on gender.
Keywords: distance from hometown; social attachment to place; psychic costs; geographic preference; hiring; worker performance; family and friends; natural experiment; Geographic Location; Familiarity; Employees; Performance; India;
Citation:
Choudhury, Prithwiraj, and Ohchan Kwon. "Homesick or Home Run? Distance from Hometown and Employee Performance: A Natural Experiment from India." Harvard Business School Working Paper, No. 19-010, August 2018. View Details