Transfer Pricing and Enforcement Policy in Oligopolistic Markets

Amerighi, Oscar (2006) Transfer Pricing and Enforcement Policy in Oligopolistic Markets. Bologna: Dipartimento di Scienze economiche DSE, p. 32. DOI 10.6092/unibo/amsacta/4720. In: Quaderni - Working Paper DSE (567). ISSN 2282-6483.
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Abstract

We set up a symmetric two-country model with two multinationals competing on the quantities and possibly manipulating their transfer prices. Governments choose both the corporate profit tax rate and the level of enforcement of the "arm's length" principle. We show that stronger enforcement increases equilibrium tax rates. We also and that a larger international ownership of multinationals leads to a "race to the top" in both policies between the two countries, while trade liberalization initially implies a "race to the bottom". But as trade becomes free enough, a further decrease in trade costs raises equilibrium tax rates and enforcement policies.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Amerighi, Oscar
Keywords
Multinational Enterprises; Transfer Pricing; Tax Competition; Enforcement Policy; Economic Integration.
Subjects
ISSN
2282-6483
DOI
Deposit date
29 Feb 2016 11:26
Last modified
29 Feb 2016 11:26
URI

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