Multinationality and profitability: the contingency of the investment opportunity set

Investigates whether the investment opportunities available to US multinationals affect their profitability relationships. Samples 100 firms from 1987 to 1992, and classifies them by high or low multinationality and high or low growth. Correlates three measures of multinationality, and of the opportunity set for each quartile, and compares the rate of return on assets by multinationality and by growth. Presents the interaction effects of means, finding that high multinationality firms have higher rates of return on assets, and so do high growth firms. Links profitability, multinationality and the investment opportunity set.