Arbeitspapier
There's no place like home: the profitability gap between headquarters and their foreign subsidiaries
Using a large data set of European firms, this paper provides evidence that operations at multinational headquarters are significantly more profitable than operations at their foreign subsidiaries. The effect turns out to be robust and quantitatively large. Our findings suggest that the profitability gap is partly driven by agency costs which arise if value–driving functions are managed by a subsidiary that is geographically separated from the headquarters management. In line with falling communication and travel costs over the last decade, the profitability gap is shown to decline over time. Apart from that, our results indicate that a higher competitiveness of multinational firms in their home markets also contributes to the profitability gap. We discuss various implications of our findings.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 2866
- Klassifikation
-
Wirtschaft
Multinational Firms; International Business
Business Taxes and Subsidies including sales and value-added (VAT)
Firm Performance: Size, Diversification, and Scope
- Thema
-
profit distribution
multinational enterprise
corporate taxes
Multinationales Unternehmen
Direktinvestition
Konzern
Tochtergesellschaft
Auslandsniederlassung
Rentabilität
Europa
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Dischinger, Matthias
Riedel, Nadine
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2009
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Dischinger, Matthias
- Riedel, Nadine
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2009
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