Taxation and Foreign Direct Investment in the United States: A Reconsideration of the Evidence / Alan J. Auerbach, Kevin Hassett.

Format:

Book

Author/Creator:

Auerbach, Alan J.

Contributor:

National Bureau of Economic Research.

Hassett, Kevin.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3895.

NBER working paper series no. w3895

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Taxation and Foreign Direct Investment in the United States

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1991.

Summary:

Foreign direct investment in the United States boomed in the late 1980s. Some have attributed this rise to the Tax Reform Act of 1986, which by discouraging investment by domestic firms may have provided opportunities for foreign firms not as strongly affected by the U.S. tax changes. We challenge this view on theoretical and empirical grounds, finding that: (1) While the argument applies to new capital investment, the boom was primarily in mergers and acquisitions; (2) While the argument holds primarily for investment in equipment, there was no shift toward the acquisition of equipment-intensive firms, and (3) The FDI boom in the U.S. was really part of a worldwide FDI boom ? the U.S. share of outbound FDI from other countries did not increase during the period 1987-9.

Notes:

Print version record

November 1991.