Formula Apportionment and Transfer Pricing under Oligopolistic Competition

Søren Nielsen, Pascalis Raimondos () and Guttorm Schjelderup

No 491, CESifo Working Paper Series from CESifo

Abstract: This paper demonstrates that under conditions of imperfect (oligopolistic) competition, a transition from separate accounting (SA) to formula apportionment (FA) does not eliminate the problem of profit shifting via transfer pricing. In particular, if affiliates of a multinational firm face oligopolistic competition, it is beneficial for the multinational to manipulate transfer prices for tax-saving as well as strategic reasons under both FA and SA. The analysis shows that a switch from SA rules to FA rules may actually strengthen profit shifting activities by multinationals.

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo_wp491.pdf (application/pdf)

Related works:
Journal Article: Formula Apportionment and Transfer Pricing under Oligopolistic Competition (2003)
Working Paper: FORMULA APPORTIONMENT AND TRANSFER PRICING UNDER OLIGOPOLISTIC COMPETITION (2000)
Working Paper: Formula Apportionment and Transfer Pricing under Oligopolistic Competition
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:ces:ceswps:_491

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().