Based on analyses of past programs to repatriate overseas corporate earnings, Wall Street analysts and tax experts expect companies would use the money for purposes such as buying back shares and mergers. Instead of adding jobs, they say, companies might cut them if they use their cash to buy rivals and then take out costs.

“There will be increased share repurchases, but limited impact on building new plants, real investment activity and employment,” said Dhammika Dharmapala, a University of Chicago law professor who has studied what U.S. companies have done with repatriated cash.

Mr. Dharmapala co-authored a working paper for the National Bureau of Economic Research that found that after companies brought back cash during a tax holiday in 2004, they spent 79 cents of every dollar on share repurchases and 15 cents on dividends.

There was no evidence of an increase in domestic investment, according to the working paper.

Read more at The Wall Street Journal