Transfer pricing and corporate social responsibility: arguments, views and agenda

Simplice Asongu, Joseph I. Uduji () and Elda N. Okolo-Obasi ()
Additional contact information
Joseph I. Uduji: University of Nigeria
Elda N. Okolo-Obasi: University of Nigeria

Mineral Economics, 2019, vol. 32, issue 3, No 7, 353-363

Abstract: Abstract The central thesis of the paper is that multinational companies (MNC) should invest in the use of “soft” methods (socially responsible behavior) to mitigate costs in society accrued due to use of “hardcore” tax evasion tactics (transfer mispricing) to maximize profits from operations in developing countries and/or countries with weak or inefficient tax laws and tax collection institutions. Therefore, we articulate the argument of corporate social responsibility (CSR) as an indirect compensation for transfer mispricing. Our aim is not to present CSR as a solution to transfer mispricing. An analytical approach is based on a content analysis of the existing literature with emphasis on a case study. We first discuss the dark side of transfer pricing (TP), next we present the link between TP and poverty and finally we advance arguments for CSR as a compensation for transfer mispricing. While acknowledging that TP is a legal accounting practice, we argue that in light of its poverty and underdevelopment externalities, the practice per se should be a strong defence for CSR because it is also associated with schemes that deprive developing countries of the capital essential for investment in health, education and development programmes.

Keywords: Corporate social responsibility; Transfer pricing; Extreme poverty (search for similar items in EconPapers)
JEL-codes: F20 H20 M14 O11 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (46)

Downloads: (external link)
http://link.springer.com/10.1007/s13563-019-00195-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Transfer Pricing and Corporate Social Responsibility: Arguments, Views and Agenda (2019)
Working Paper: Transfer Pricing and Corporate Social Responsibility: Arguments, Views and Agenda (2019)
Working Paper: Transfer Pricing and Corporate Social Responsibility: Arguments, Views and Agenda (2019)
Working Paper: Transfer Pricing and Corporate Social Responsibility: Arguments, Views and Agenda (2019)
Working Paper: Transfer Pricing and Corporate Social Responsibility: Arguments, Views and Agenda (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:minecn:v:32:y:2019:i:3:d:10.1007_s13563-019-00195-2

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13563

DOI: 10.1007/s13563-019-00195-2

Access Statistics for this article

Mineral Economics is currently edited by Magnus Ericsson and Patrik Söderholm

More articles in Mineral Economics from Springer, Raw Materials Group (RMG), Luleå University of Technology
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().