Trade, Multinationals, and Transfer Pricing Regulations

Center for Economic Studies Working Paper at University of Munich No. 152

25 Pages Posted: 23 Apr 1998

See all articles by Guttorm Schjelderup

Guttorm Schjelderup

Norwegian School of Economics (NHH) - Department of Business and Management Science

Alfons J. Weichenrieder

Goethe University Frankfurt - Department of Applied Econometrics and International Economic Policy; Vienna University of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 1998

Abstract

Recent years have seen the introduction of profit comparisons by national tax authorities to cope with multinationals' profit shifting activities. The paper argues that a country which switches from price related transfer pricing rules to profit related measures can reduce imports without changing firms' transfer prices. The trade effect makes the change of transfer pricing rules a potential instrument of protectionism and strategic trade policy.

JEL Classification: F23, H87

Suggested Citation

Schjelderup, Guttorm and Weichenrieder, Alfons J., Trade, Multinationals, and Transfer Pricing Regulations (January 1998). Center for Economic Studies Working Paper at University of Munich No. 152. Available at SSRN: https://ssrn.com/abstract=74708 or http://dx.doi.org/10.2139/ssrn.74708

Guttorm Schjelderup

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Alfons J. Weichenrieder (Contact Author)

Goethe University Frankfurt - Department of Applied Econometrics and International Economic Policy ( email )

United States

HOME PAGE: http://www.uni-frankfurt.de/fb02/weichenrieder/

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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