The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
The Outreach and Education function engages, empowers and educates the Second District communities that the Bank serves, especially civic leaders, students, educators, small business owners, policymakers and the general public. It furthers the Bank's commitment to the region by listening to the communities we serve and leveraging our unique attributes to positively impact school and university programs, as well as analysis and research.
Making Sense of the Profits of Foreign Firms in the United States
Summer-Fall 1994Volume 19, Number 2
Authors: David S. Laster and Robert N. McCauley
The scant profit of foreign firms operating in the United States has prompted many observers to suggest that these firms understate their income to reduce their U.S. tax liability. This article offers an alternative explanation: a surge in foreign acquisitions of U.S. firms in the 1980s drove down the average profitability of foreign-owned firms in this country. The authors also find that high leverage and transfer pricing have contributed tributed to the low U.S. profits of foreign firms.