quantitatively large. Our findings suggest that the profitability gap is partly driven by agency costs which arise if value … communication and travel costs over the last decade, the profitability gap is shown to decline over time. Apart from that, our … profitability gap. We discuss various implications of our findings …

current capital stock and a measure of short-run profitability, where the latter is a state variable which is unobserved to …-2012, and find that both increased short-run profitability and a higher capital stock lowers the exit probability - this effect …

profit. Setting up a model that allows for profitable and loss-making affiliates of multinationals, we show that profit … equilibrium, affiliates might over-invest and the bunching-related investment effects generate a tendency for too high profit …