TY  - JOUR
AU  - Auerbach,Alan J.
AU  - Hassett,Kevin
TI  - Taxation and Foreign Direct Investment in the United States: A Reconsideration of the Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3895
PY  - 1991
Y2  - November 1991
UR  - http://www.nber.org/papers/w3895
L1  - http://www.nber.org/papers/w3895.pdf
N1  - Author contact info:
Alan J. Auerbach
Department of Economics
508-1 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu

Kevin Hassett
American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
E-Mail: khassett@aei.org
M1  - published as Alan J. Auerbach, Kevin Hassett, Joel Slemrod. "Taxation and Foreign Direct Investment in the United States: A Reconsideration of the Evidence," in Alberto Giovannini, R. Glen Hubbard, and Joel Slemrod, eds., "Studies in International Taxation" University of Chicago Press (1993)

M2  - featured in NBER digest on 1992-09-01
AB  - 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.
ER  -