Do Intangible Assets Explain High U.S. Foreign Direct Investment Returns?

U.S. investors abroad receive a higher return on their assets than their counterparts that invest in the United States. I examine the degree to which excluding intangible assets from the measurement of foreign direct investment can account for this gap. Using a growth accounting framework, I estimate intangible capital stocks for foreign-owned a liates and nd that including unmeasured capital reduces the gap by up to two thirds. U.S. a liates abroad hold a relatively large share of their assets as intangible capital since they are taxed at the relatively high U.S. corporate rate and intangible investment is expensed. Accounting for intangibles reduces a similar gap in British FDI returns by nearly half.

Author: Benjamin Bridgman
Publisher: Bibliogov
Published: 02/08/2013
Pages: 36
Binding Type: Paperback
Weight: 0.18lbs
Size: 9.69h x 7.44w x 0.07d
ISBN: 9781288732050

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