The authors are respectively, Associate Professor, Graduate School of Business, Columbia University and Chief, Quantitative Studies, Division of International Finance, Board of Governors of the Federal Reserve System. Financial support was provided by the U.S. Department of State and the Board of Governors of the Federal Reserve System. Neither organization shares responsibility for the opinions expressed in this paper. The authors wish to thank Stephen Preston and Walter Enders of Columbia University, who co-authored with them an antecedent study of native firm cost-functions. Arnold Gilbert of the Bureau of Economic Analysis, U.S. Department of Commerce provided invaluable assistance in programming and running regression for us on BEA's Multinational Data System. Our thanks go also to Terry Coble, Cora Flaifel and Sam Parrillo for expert research assistance.