One of the reasons for the success of multinational enterprises in their ability to create in their supranational organisations "internal markets" which eliminate the imperfections of external world markets caused by tariffs on trade, restrictions on the flow of capital, information costs and so on. The method multinationals use to create and sustain internal markets is transfer pricing. Multinationals use to their advantage the difference between nominal accounting and real transfers from their head offices to a subsidiary in different countries to overcome transaction costs and restrictions on trade and capital flows.
This book, first published in 1985, examines these and other aspects of multinationals’ use of transfer pricing. It puts forward original thinking and research findings by leading experts in this area. Empirical results are related to the activities of multinationals in less developed countries. This volume covers the economic theories of transfer pricing, accounting and fiscal practices and implications for government policies and regulations, and will be of interest to students of economics and business studies.
Table of Contents
Preface; 1. Introduction Alan M. Rugman and Lorraine Eden; Part One: The Theory of Transfer Pricing; 2. The Microeconomics of Transfer Pricing Lorraine Eden 3. Transfer Pricing and Economic Efficiency W. Erwin Diewert 4. Transfer Pricing: A Taxonomy of Impacts on Economic Welfare Robert Z. Aliber 5. Transfer Pricing in Exhaustible Resource Markets Larry Samuelson 6. The Equivalence of Tariffs and Quotas in the Multinational Enterprise Takoa Itagaki 7. Fiscal Transfer Pricing: Accounting for Reality G. David Quirin 8. Financial Dimensions of Transfer Pricing Donald J. S. Brean; Comments on Unresolved Issues in Transfer Pricing Models Harry Grubert; Part Two: Empirical Evidence on Transfer Pricing; 9. Transfer Pricing in the Canadian Petroleum Industry Alan M. Rugman 10. An Empirical Investigation of International Transfer Pricing by US Manufacturing Firms Anita M. Benvignati 11. A Comparison of Import Pricing by Foreign and Domestic Firms in Brazil Paul A. Natke 12. Some Evidence on Transfer Pricing by Multinational Corporations Donald J. Lecraw; Comments on Efficiency, Equity and Transfer Pricing in LDCs Gerald K. Helleiner; Part Three: Regulation of Transfer Pricing; 13. Transfer Pricing Problems in Developing Countries Sylvain R. F. Plasschaert 14. The Regulation of Transfer Prices by Developing Countries: Second-Best Policies? Walter A. Chudson 15. International Arbitration of Transfer Pricing Disputes under Income Taxation Carl S. Shoup; Comments on the Difficulties in Regulating Transfer; Bibliography; Notes on Contributors; Author Index; Subject Index