There’s No Place Like Home: The Profitability Gap between Headquarters and their Foreign Subsidiaries

Research, Preprint OPEN
Dischinger, Matthias; Riedel, Nadine;
  • Publisher: Center for Economic Studies and Ifo Institute (CESifo) Munich
  • Related identifiers: doi: 10.5282/ubm/epub.10976
  • Subject: Unternehmenszentrale | Mikroökonomik | profitability distribution | Auslandsniederlassung | multinational enterprise | profit distribution | Rentabilität | Seminar für Wirtschaftspolitik | Volkswirtschaft | Informationsökonomik | Konzern | D82 | Ausländische Tochtergesellschaft | Europa | Munich Discussion Papers in Economics | F23 | Auslandsinvestition | Direktinvestition | Tochtergesellschaft | Finanzwissenschaft | H25 | L25 | Industrieökonomik | Multinationales Unternehmen | corporate taxes | profit distribution, multinational enterprise, corporate taxes | profitability distribution; multinational enterprise; corporate taxes
    • jel: jel:F23 | jel:D82 | jel:H25 | jel:L25
      ddc: ddc:330

Using a large panel data set for European firms, this paper provides evidence that operations at multinational headquarters are significantly more profitable than perations at their foreign subsidiaries. The effect turns out to be robust and quantitatively large. Our fi... View more
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