TY - JOUR
T1 - Offshore Profit Shifting and Aggregate Measurement
T2 - Balance of Payments, Foreign Investment, Productivity, and the Labor Share
AU - Guvenen, Fatih
AU - Mataloni, Raymond J.
AU - Rassier, Dylan G.
AU - Ruhl, Kim J.
N1 - Publisher Copyright:
© 2022 American Economic Association. All rights reserved.
PY - 2022/6
Y1 - 2022/6
N2 - We show how offshore profit shifting by US multinational enterprises affects several key measures of the US 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 US direct investment abroad is reattributable to the United States. We find that adjusting for profit shifting shrinks the trade deficit, decreases the return on US foreign direct investment abroad, boosts productivity growth rates in the late 1990s and early 2000s, and lowers labor's share of income.
AB - We show how offshore profit shifting by US multinational enterprises affects several key measures of the US 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 US direct investment abroad is reattributable to the United States. We find that adjusting for profit shifting shrinks the trade deficit, decreases the return on US foreign direct investment abroad, boosts productivity growth rates in the late 1990s and early 2000s, and lowers labor's share of income.
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U2 - 10.1257/aer.20190285
DO - 10.1257/aer.20190285
M3 - Article
AN - SCOPUS:85132579853
SN - 0002-8282
VL - 112
SP - 1848
EP - 1884
JO - American Economic Review
JF - American Economic Review
IS - 6
ER -
