Effect of transfer pricing on MNCs' behavior
| Author | Methodology | Finding | Theoretical gap | Empirical gap | Problem |
|---|---|---|---|---|---|
| Marques and Pinho (2016) | Creating a transfer price index | Earnings tax rate differential sensitivity decreases with stricter transfer pricing | Replication in various countries/regions and differing transfer pricing rigidity and revenue bonuses is needed to confirm the findings | Assessing transfer pricing regulations' efficacy in non-European nations and their effect on MNCs' profit-shifting behavior | Examining transfer pricing regulations' influence on MNCs' profit-shifting behavior in non-European nations |
| Wier (2020) | Use transaction-level custom data to test for differences between transfer prices and “arm's-length pricing.” | South African MNCs manipulate transfer prices to move taxable earnings, costing imported goods 0.5% of corporate tax | Transfer mispricing in poor nations needs to be proven | Developing countries need firm-level transfer pricing data | Conducting comparable studies in other developing nations to assess transfer mispricing |
| Kumar et al. (2021) | Bibliometric Analysis of Scopus Data | The United States is the leading country in transfer pricing, followed by the United Kingdom and Australia | Transfer pricing as a business tool needs to be examined beyond compliance and tax management | Transfer pricing's strategic effects on firms need additional empirical research | Exploring the strategic effects of transfer pricing on firms |
| Gao and Zhao (2015) | Creating a thorough model to calculate the best transfer price for a multinational business (MNC) to optimize profits | Setting transfer prices to optimize overall organization profit can impact MNCs' market share and competitive advantage | Examining how transfer pricing affects the MNC's market share and competitive advantage | Identifying the impact of transfer pricing on MNCs' market share and competitive advantage | |
| Sebele-Mpofu et al. (2021) | Interpretivism research paradigm, Qualitative method | The article underlines the requirement for transfer pricing laws that are compliant with international best practices and relevant to the nation's needs | Lack of empirical research on MNEs' tax evasion and manipulation of transfer pricing in developing nations, particularly in Africa |
| Author | Methodology | Finding | Theoretical gap | Empirical gap | Problem |
|---|---|---|---|---|---|
| Creating a transfer price index | Earnings tax rate differential sensitivity decreases with stricter transfer pricing | Replication in various countries/regions and differing transfer pricing rigidity and revenue bonuses is needed to confirm the findings | Assessing transfer pricing regulations' efficacy in non-European nations and their effect on MNCs' profit-shifting behavior | Examining transfer pricing regulations' influence on MNCs' profit-shifting behavior in non-European nations | |
| Use transaction-level custom data to test for differences between transfer prices and “arm's-length pricing.” | South African MNCs manipulate transfer prices to move taxable earnings, costing imported goods 0.5% of corporate tax | Transfer mispricing in poor nations needs to be proven | Developing countries need firm-level transfer pricing data | Conducting comparable studies in other developing nations to assess transfer mispricing | |
| Bibliometric Analysis of Scopus Data | The United States is the leading country in transfer pricing, followed by the United Kingdom and Australia | Transfer pricing as a business tool needs to be examined beyond compliance and tax management | Transfer pricing's strategic effects on firms need additional empirical research | Exploring the strategic effects of transfer pricing on firms | |
| Creating a thorough model to calculate the best transfer price for a multinational business (MNC) to optimize profits | Setting transfer prices to optimize overall organization profit can impact MNCs' market share and competitive advantage | Examining how transfer pricing affects the MNC's market share and competitive advantage | Identifying the impact of transfer pricing on MNCs' market share and competitive advantage | ||
| Interpretivism research paradigm, Qualitative method | The article underlines the requirement for transfer pricing laws that are compliant with international best practices and relevant to the nation's needs | Lack of empirical research on MNEs' tax evasion and manipulation of transfer pricing in developing nations, particularly in Africa |
Source(s): Table created by author
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