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Do US multinationals deserve tax punishment because they "Ship jobs overseas"? Studies comparing US firms that engage in outward investment with similar firms that stay at home show that outward bound firms consistently export more from the United States than the homebodies.2 If US tax policy were changed so as to hinder outward investment by US firms, evidence indicates, US export performance would be weaker, not stronger, as a consequence. Somewhat surprisingly, the positive relationship between outward investment and exports holds for US low-tech (low R&D) industries just as for US high-tech industries and for heavily unionized US industries just as for nonunionized US industries.
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