At a Cost: The Real Effects of Transfer Pricing Regulations

Ruud de Mooij and Li Liu

IMF Economic Review, 2020, vol. 68, issue 1, No 9, 268-306

Abstract: Abstract Unilateral adoption of transfer pricing regulations (TPRs) may have a negative impact on real investment by multinational corporations (MNCs). This paper uses a quasi-experimental research design, exploiting unique panel data on domestic and multinational companies in 27 countries during 2006–2014, to find that MNC affiliates reduce their investment by over 11% following the introduction of TPRs. There is no significant reduction in total investment by the MNC group, suggesting that these investments are most likely shifted to affiliates in other countries.

JEL-codes: F23 H25 H87 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Working Paper: At A Cost: the Real Effects of Transfer Pricing Regulations (2018)
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DOI: 10.1057/s41308-019-00105-0

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