Foreign direct investment, Corruption, Income tax treaties, F21, F23, H25, O17,

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Abstract. Available evidence indicates that costs of non-traded services in domestic transportation, wholesaling, and retailing (domestic margins) are higher if a good is shipped in international trade than if it is shipped from domestic producers to domestic consumers. Consequently, domestic margins appear to act as natural barriers to trade in the same manner as international transport costs do. This paper presents estimates of the barriers that the domestic margins impose against u.s. imports and shows that they exceed the barriers imposed by tariffs and international transport costs combined.Commerce interne et coats de transport en tant qu'entraves au commerce international. Les renseignements disponibles indiquent que les cofits des services non-transiges internationalement (transport interne, commerce de gros et de d6tail) sont plus grands si le bien est exp6di6 outre-frontieres que s'il est exp6die de producteurs nationaux a consommateurs nationaux. En consequence, les marges b6n6ficiaires dans le commerce int6rieur semblent agir comme entraves naturelles au commerce international de la meme maniere que les couts de transport internationaux. Ce memoire tente d'6valuer la hauteur des barrieres que ces marges ben6ficiaires imposent aux importations en provenance des Etats-Unis, et suggere qu'elle est plus grande que celle engendree par l'effet combin6 des tarifs douaniers et des coats de transport au plan international.Research for this paper was done while both authors were with the Office of Economics in the u.s. International Trade Commission. The views expressed are those of the authors and do not necessarily represent the views of the International Trade Commission or the Treasury Department. We thank Alan Deardorff, James Harrigan, Walter Mankoff, Tracy Murray, Joseph Shaanon, Paula Young, and two anonymous referees for helpful comments.

This paper provides estimates of the amount of income shifted across national borders within the manufacturing operations of US multinational corporations (MNCs) in 1988. It is assumed that each MNC arranges its investments such that, after accounting for income shifting opportunities, the after-tax rate of return on a marginal investment is the same for all its affiliates, regardless of location. The income shifting is then inferred by comparing shares of after-tax profits, assets and sales of the affiliated members. It is estimated that such shifting amounted to about $8 billion (on net), which is less than 4% of the worldwide taxable income of the manufacturing MNCs.

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