Transfer Pricing and Enforcement Policy in Oligopolistic Markets

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 567

Classification and Topics

• Classification: Wirtschaft
• Subject: Verrechnungspreis ; Multinationales Unternehmen ; Steuerwettbewerb ; Oligopol ; Rechtsdurchsetzung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Amerighi, Oscar
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2006

Further information

• DOI: doi:10.6092/unibo/amsacta/4720
• Handle: http://hdl.handle.net/10419/159408
• Last update: 10.03.2025, 11:42 AM CET