Centralized vs. De-centralized Multinationals and Taxes

Søren Bo Nielsen (), Pascalis Raimondos-Møller () and Guttorm Schjelderup ()

No CESifo Working Paper No. 1586, CESifo Working Paper Series from CESifo Group Munich

Abstract: The paper examines how country tax differences affect a multinational enterprise’s choice to centralize or de-centralize its decision structure. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in MNEs - here, as a strategic pre-commitment device and a tax manipulation instrument -, we show that (de-)centralized decisions are more profitable when tax differentials are (small) large.

Keywords: centralized vs. de-centralized decisions; taxes; MNEs (search for similar items in EconPapers)
JEL-codes: F23 H25 L23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2005
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Working Paper: Centralized vs. De-centralized Multinationals and Taxes (2005)
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