Using panel data of firms located in Europe (Amadeus), we compare returns of affiliates of US and non-US multinationals, and explore the sources of their differences. It turns out that US affiliates have 14% higher sales to assets than affiliates of non-US multinational, controlling by...

Using firm-level data on U.S. multinationals, we find that affiliates created for vertical FDI motives seem to be larger and fewer—both within the firm and across affiliates—while affiliates that appear to be created for horizontal FDI motives are smaller and more common. Next, we...

The crucial difference between Foreign Direct Investment (FDI) and other international financial flows is that the former involves technology flows across countries. In the presence of country-specific shocks, these flows not only alter the distribution of output across countries, but also...

We document new facts about the behavior of U.S. multinational firms and their affiliates regarding the product space in which they operate, the nature of their input-output relationships, and intra-firm trade flows. We use confidential data on U.S. multinational firms from the Bureau of...

This paper analyzes the firm's choice between serving a foreign market through exports or foreign affiliate sales in an environment characterized by country speci c shocks to the cost of production. Our model predicts that country pairs with less correlated output fluctuations trade more,...