Productivity growth in the US has been slowing down over the last decade. Since output per person determines the rate of GDP growth, estimates of GDP growth have also been downward shifted. This study shows that profit shifting by multinational corporations has contributed to the productivity slowdown, and ultimately to GDP growth rate in the US.
MNC's have an incentive to shift their profits from the US to affiliates in lower tax nations. They do that in many ways. Since intellectual capital is highly mobile they shift their intangible intellectual capital to low wage countries. They retain most of the return on intellectual capital in the low tax nations. That systematically understates US GDP and US productivity. That is especially evident in capital intensive industries which invest heavily in intellectual capital. Foreign MNC's with affiliates in the US also shift their earnings from the US to low tax nations for a similar reason. That also reduces US GDP and US productivity. This may explain why the rapid expansion of technology in the US does not appear to have had a positive effect on productivity growth. Some argue that it takes time to deploy the technology efficiently but it may also be determined by MNC profit shifting to low tax nations.