& XSLT sorry for the messy sample files... my mail client removed the tabs.

I'm using saxon 8.8j

i already used keys upon your suggestion, however i did not notice a 
change in the processing time, but i'll test more files just to be sure.

here's now my new xsl

<?xml version="1.0" encoding="UTF-8"?> 
<xsl:stylesheet version="2.0" 
xmlns:xsl="http://www.w3.org/1999/XSL/Transform" 
xmlns:xs="http://www.w3.org/2001/XMLSchema" 
xmlns:ati="http://www.asiatype.com/xslt-functions" 
exclude-result-prefixes="xs ati"> 
  <xsl:output method="xml" version="1.0" encoding="UTF-8"/> 
  <xsl:variable name="abbreviations" as="element()+" 
select="document('publishers_data.xml')/root/publisher/abbrev"/> 
  <xsl:key name="abbrev" match="expanded" use="preceding-sibling::abbrev"/> 
  <xsl:template match="/"> 
     <xsl:apply-templates/> 
  </xsl:template> 
  <xsl:template match="text()[ancestor::ab and not(ancestor::note[@id 
and @n and 
@lang])][exists($abbreviations[matches(current(),concat('(^|\W)(',ati:escape(.),')($|\W)'))]
)]"> 
      <xsl:variable name="str" as="xs:string" select="."/> 
      <xsl:variable name="search-str" as="xs:string+" 
select="$abbreviations[matches($str,concat('(^|\W)(',ati:escape(.),')($|\W)'))]"/> 
      <xsl:variable name="replace" as="element()*"> 
           <xsl:for-each select="$search-str"> 
               <xsl:variable name="abbr" as="xs:string" select="."/> 
               <abbr type="title" expand="{$abbreviations/key('abbrev', 
$abbr)}"> 
                   <xsl:value-of select="$abbr"/> 
               </abbr> 
           </xsl:for-each> 
       </xsl:variable> 
       <xsl:sequence select="ati:replace-with-nodes($str, $search-str, 
$replace)"/> 
    </xsl:template> 
    <xsl:template 
match="@*|element()|comment()|processing-instruction()" mode="#all"> 
        <xsl:copy> 
            <xsl:apply-templates select="@*|node()"/> 
        </xsl:copy> 
    </xsl:template> 
    <xsl:function name="ati:replace-with-nodes" as="node()+"> 
         <xsl:param name="input" as="xs:string"/> 
         <xsl:param name="words-to-replace" as="xs:string*"/> 
         <xsl:param name="replacement" as="node()*"/> 
         <xsl:variable name="regex" select="string-join(for $w in 
$words-to-replace return concat('(', ati:escape($w), ')'),'|')"/> 
         <xsl:analyze-string select="$input" regex="{$regex}"> 
              <xsl:matching-substring>  <xsl:variable name="i" 
as="xs:integer" select="(1 to count($words-to-replace))[regex-group(.)]"/> 
                   <xsl:sequence select="$replacement[$i]"/> 
              </xsl:matching-substring> 
          <xsl:non-matching-substring> 
              <xsl:value-of select="."/> 
          </xsl:non-matching-substring> 
        </xsl:analyze-string> 
     </xsl:function> 
     <xsl:function name="ati:escape"> 
        <xsl:param name="s" as="xs:string"/> 
        <xsl:sequence 
select="replace($s,'[\\\|\.\-\^\?\*\+\(\)\{\}\[\]\$]','\\$0')"/> 
     </xsl:function> 
</xsl:stylesheet> 
> > heres a short version of the publishers_data.xml:
> >
> > <root>
> > <publisher>
> > <abbrev>Inschriften von Priene</abbrev>
> > <expanded>Inschriften von Priene</expanded> </publisher> 
> > <publisher> <abbrev>P. Mil. Congr. XVIII</abbrev> 
> > <expanded>Papiri documentari dell'UniversitàCattolica di 
> > Milano</expanded> </publisher> <publisher> <abbrev>P. Jud. 
> > Des. Misc.</abbrev> <expanded>Discoveries in the Judean 
> > Desert XXXVIII</expanded> </publisher>
> > <!-- more publishers here -->
> > </root>
> >
> > heres a snippet of the source xml:
> >
> > <!-- preceding::node() of ab -->
> > <ab lang="grk" n="1">
> > <foreign lang="grk">Î? γέγονε καÏ?á½° Ï?οὺÏ? Î?αρείοÏ?</foreign> 
> > <note place="margin">a c</note> <lb n="5"/> <foreign 
> > lang="grk">Ï?ρόνοÏ?Ï? Ï?οῦ μεÏ?á½° Î?αμβύÏ?ην βαÏ?ιλεύÏ?ανÏ?οÏ
?, á½?Ï?ε καὶ 
> > Î?ιονύÏ?ιοÏ? ἦν ὁ Î?ιλήÏ?ιοÏ?</foreign> <lb/>(III), <foreign 
> > lang="grk">ἐÏ?ὶ Ï?á¿?Ï? ξ¯ε¯ á½?λÏ?μÏ?ιάδοÏ?</foreign> (520/16)<foreign 
> > lang="grk">Î? á¼±Ï?Ï?οριογράÏ?οÏ?. ῾Î?ρόδοÏ?οÏ? δὲ ὁ ῾Î?λι-</fo
reign>  
> > <note place="margin">v</note> <lb/> <foreign 
> > lang="grk">καρναÏ?εὺÏ? á½ Ï?έληÏ?αι Ï?ούÏ?οÏ?, νεώÏ?εροÏ? ὤν. 
καὶ ἦν 
> > á¼?κοÏ?Ï?Ï?á½´Ï? ΠρÏ?Ï?αγόροÏ?</foreign> <note id="n7" n="7" lang="ger"> 
> > <foreign lang="grk">ὤνÎ? γέγονε γὰρ μεÏ?á¾½ αὐÏ?όν</foreign> 
> > A</note> <lb/> <foreign lang="grk">ὁ ῾Î?καÏ?αá¿?οÏ?. Ï?ρῶÏ?οÏ? δὲ 
> > á¼±Ï?Ï?ορίαν Ï?εζῶÏ? ἐξήνεγκε, Ï?Ï?γγραÏ?ὴν δὲ Φερεκá½
»Î´Î·Ï?</foreign>  
> > <note id="n8â??9" n="8â??9" lang="ger"> <foreign 
> > lang="grk">Ï?ρῶÏ?οÏ?â??νοθεύεÏ?αι</foreign> wiederholt s. <foreign 
> > lang="grk">ὶÏ?Ï?ορá¿?Ï?αι</foreign>, s. <foreign 
> > lang="grk">Ï?Ï?γγραÏ?εá¿?Ï?</foreign>.</note>
> > <lb/>(I 3). <foreign lang="grk">Ï?á½° γὰρ á¾½Î?κοÏ?Ï?ιλάοÏ?</foreign> 
> > (<link type="boj" targets="a002" n="BOJTEXT002_T_7">2 T 
> > 7</link>) <foreign lang="grk">νοθεύεÏ?αι.</foreign> <note 
> > id="n9" n="9" lang="ger"> <foreign 
> > lang="grk">á¾½Î?κοÏ?Ï?ιλάοÏ?</foreign> Vossius <foreign 
> > lang="grk">á¾½Î?γηÏ?ιλάοÏ?</foreign> Suid</note> </ab>
> > <!-- following::node() of ab -->
> >
> > all: ab nodes appear in the same level (same depth) though out.
> >
> > Any suggestions are welcome.
> >
> > Thanks,
> > --
> > Jeff
> >
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