The media spotlight has recently been on Apple Inc. AAPL +0.52% for shifting profits overseas to avoid U.S. taxes. In its international tax strategy, though, Apple is no different from other American technology companies, which (like Apple) began moving manufacturing overseas starting in the early 1980s.
Initially, U.S. technology firms that went abroad during this period were drawn by the lower labor, sourcing, and procurement costs. They also found they could eliminate exchange-rate risk by producing and selling in the same currency.
But these companies soon discovered another important advantage of being global: favorable taxation.
Read the full post at MarketWatch.
Charles Kane is a Senior Lecturer in Finance at the MIT Sloan School of Management.