Advanced Search
MyIDEAS: Login to save this paper or follow this series

The non-neutrality of the arm's length principle with imperfect competition

Contents:

Author Info

  • A. Lemus

    ()

  • Diego Moreno

    ()

Abstract

The Arm’s Length Principle (ALP) has been broadly adopted by OECD countries to avoid the use of firm’s internal transfer pricing as a device for shifting profits into low tax jurisdictions. While the ALP does not affect market outcomes under perfect competition, we show that its adoption is non-neutral under imperfect competition: a strict (lax) application of the ALP softens competition among subsidiaries (parents). Thus, under imperfect competition optimal transfer pricing regulations must account for their impact on market outcomes, as well as for their impact on tax revenue.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://e-archivo.uc3m.es/bitstream/10016/12639/1/we_11_34.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1134.

as in new window
Length:
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:cte:werepe:we1134

Contact details of provider:
Postal: C./ Madrid, 126, 28903 Getafe (Madrid)
Phone: +34-91 6249594
Fax: +34-91 6249329
Email:
Web page: http://www.eco.uc3m.es
More information through EDIRC

Related research

Keywords: Transfer pricing regulation; Arm´s Length Principle; Imperfect competition; Vertical separation;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Tim Baldenius & Stefan Reichelstein, 2006. "External and Internal Pricing in Multidivisional Firms," Journal of Accounting Research, Wiley Blackwell, Wiley Blackwell, vol. 44(1), pages 1-28, 03.
  2. Anil Arya & Brian Mittendorf, 2008. "Pricing Internal Trade to Get a Leg up on External Rivals," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 17(3), pages 709-731, 09.
  3. Jack Hirshleifer, 1956. "On the Economics of Transfer Pricing," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 29, pages 172.
  4. Charles E. Hyde & Chongwoo Choe, 2005. "Keeping Two Sets of Books: The Relationship Between Tax and Incentive Transfer Prices," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 14(1), pages 165-186, 03.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ana B. Lemus, 2011. "Strategic incentives for kepping one set of books under the Arm's Length Principle," Economics Working Papers we1135, Universidad Carlos III, Departamento de Economía.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cte:werepe:we1134. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.