NBER Working Paper Series
Выпуски:
Опубликовано на портале: 23-12-2003
James R. Markusen, Anthony J. Venables
NBER Working Paper Series.
1996.
w5483.
Adapting our earlier model of multinationals, authors address policy issues involving
wages and labor skills. Multinational firms may arise endogenously, exporting their
firm-specific knowledge capital to foreign production facilities, and geographically
fragmenting production into skilled and unskilled-labor-intensive activities. Multinationals
thus alter the nature of trade, from trade in goods (produced with both skilled and
unskilled labor) to trade in skilled- labor-intensive producer services. Results
shed light on several policy questions. First, multinationals increase the skilled/unskilled
wage gap in the high income country and, under some circumstances, in the low income
country as well. Second, there is a sense in which multinationals export low skilled
jobs to the lower income country. Third, trade barriers do not protect unskilled
labor in the high income countries. By inducing a regime shift to multinationals,
trade barriers protect the abundant factor, at least in the high income country and
possibly in both countries. Fourth, a convergence in country characteristics induces
the entry of multinationals and raises the skilled-unskilled wage gap in the initially
large and skilled-labor-abundant country, and possibly in the small skilled-labor-scarce
country as well.


Опубликовано на портале: 23-12-2003
John Mutti, Harry Grubert
NBER Working Paper Series.
1996.
w5526.
This paper examines how rules to determine the source of income internationally for
tax purposes can have important effects on the form in which taxable income is reported
and on the location of economic activity. In the case of U.S. law, two provisions
are significant: allowing a portion of export income to be regarded as foreign source
and treating royalties received as foreign source. These source rules have become
increasingly important due to tax policy changes adopted in the 1980s and to the
growing role in U.S. production and trade of goods that require intangible intellectual
property. In addition, very similar transactions can be carried out as trade in goods,
trade in services or production by a foreign affiliate, and tax incentives can influence
that choice. How the source rules operate and the incentives they create are demonstrated
in a set of stylized calculations to determine after-tax returns under various assumptions
about relevant income and withholding tax rates, tariffs, and the importance of tangible
and intangible capital in production. An assessment of the empirical importance of
these provisions is based on recent studies of the determinants of trade and investment
by U.S. multinational corporations. The treatment of royalty income appears to encourage
royalty payments from high-tax countries and to promote real economic activity there.

