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...

overall gains from openness.

We find that the sunk entry cost estimated in a model with the necessary convex factor adjustment costs are about 50 percent smaller than they are in a model without other costs of adjustment.