Working Papers

“Does Foreign Tax Arbitrage Promote Innovation?”
US multinationals’ use of intellectual property abroad through subsidiaries in foreign tax havens supports domestic innovation.

“Foreign investment of US multinationals: the effect of tax policy and agency conflicts” with Brent Glover and Oliver Levine.
The 2017 Tax Cut and Jobs Act 1) lowered the tax rate on foreign earnings, and 2) increased the opportunity cost of capital abroad by lifting restrictions on repatriating foreign profits. With respect to foreign investment, the latter of these countervailing effects dominates.

“The Real Effects of US Tax Arbitrage by Foreign Multinational Firms”
Foreign firms strip profits out of the US to avoid taxes. When this becomes harder (due to foreign countries’ introduction of CFC legislation), they scale back investment and employment in the US.

“External Governance and Internal Resource Allocation” with Andrew Bird, Stephen A. Karolyi, and Thomas G. Ruchti.
External governance improves intra-firm resource allocation.

“The Direct Investment Income Puzzle”
The official statistics – whether the published aggregates or the confidential microdata – do not support the longstanding view that US direct investment abroad outperforms foreign direct investment in the US.

“Heads I win, tails you lose: asymmetric taxes, risk taking, and innovation” with Brent Glover and Oliver Levine.
Paper — BibTeX
The US corporate tax system incentivizes US firms to invest in riskier projects abroad than what they would choose in the US.