Gary Clyde Hufbauer is the Reginald Jones Senior Fellow at the Peterson Institute for International Economics. He has written extensively on international trade, investment, and tax issues. Among his many award-winning books are Outward Foreign Direct Investment and US Exports, Jobs, and R&D: Implications for US Policy (2013), Economic Sanctions Reconsidered (2008), and NAFTA Revisited: Achievements and Challenges (2005). Theodore H. Moran holds the Marcus Wallenberg Chair in International Business and Finance at the School of Foreign Service at Georgetown University. He is also the founder and director of the Landegger Program in International Business Diplomacy at the university. Lindsay Oldenski is an assistant professor at Georgetown University specializing in international trade and multinational organizations. She has published in Journal of International Economics and Review of Economics and Statistics.
Outward FDI, US Exports, US Jobs, and US R&D: Implications for US Policyby Gary Clyde Hufbauer, Theodore H. Moran, Lindsay Oldenski
It is not in the US interest to adopt tax and regulatory policies that would discourage global engagement by US multinational corporations (MNCs). Research presented in this book shows that the expansion of foreign affiliates of US MNCs is positively associated with more production, greater employment, higher exports, and more research and development (R&D) in the United States. These findings suggest that less investment abroad by US firms would weaken—not strengthen—the US economy. This analysis by no means implies that there are only winners and no losers from outward investment. Changing patterns of MNC investment, like changing patterns of technology and production more generally, contribute to job losses and dislocations for some workers and to new opportunities for others. To benefit the US economy and US workers most broadly, the United States will want to search for ways to strengthen the appeal of the United States as a base for the operations of international firms. High among the recommendations to accomplish this, the United States should adopt a territorial tax system, like the great majority of developed countries.
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