Work

Offshore Profit Shifting and Aggregate Measurement: Balance of Payments, Foreign Investment, Productivity, and the Labor Share

Year: 2017

Type: report

Abstract: We show how offshore profit shifting by U.S. multinational enterprises affects several key measures of the U.S. economy.Profits shifted out of the United States grew rapidly from the mid-1990s to 2010 and have since waned.From 1982-2016, on average, 38 percent of income attributed to U.S. direct investment abroad is reattributable to the United States.We find that adjusting for profit shifting shrinks the trade deficit, decreases the return on U.S. foreign direct investment abroad, boosts productivity growth rates in the late 1990s and early 2000s, and lowers labor's share of income.

Source: National Bureau of Economic Research

DOI: 10.3386/w23324

Authors: Fatih Guvenen, Raymond Mataloni, Dylan Rassier, Kim Ruhl

Institutions: Bureau of Economic Analysis, University of Minnesota, National Bureau of Economic Research, University of Wisconsin–Madison, University of Minnesota System

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funder: U.S. Department of Commerce

OpenAlex ID: W2569720904

Cites: 46

Cited by: 80

Related to: 10