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Transferred Price And The Sector Of Productive Services As The Key Preconditions To Smart, Sustainable, And Inclusive Growth

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  • Radim Valenčík
  • Petr Wawrosz

Abstract

The paper explain analyses the essence of human capital contract (HCC). It is usually suggested as a contract that can help people without sufficient amount of money to invest in their human capital and due to the investment receive higher future income. Although the idea of HCC is quite old its practice usage becomes quite rare. We try to find reasons why it is happen. One of the possible explanation could be that existed contracts works only in the field of education, But they can be used also in other areas, generally everywhere where a customer receive some services and quality of the service affects, at least partially, costumer´s future productivity. We therefore call such services as productive services and sector of all such specified services as the sector of productive services. The sector includes health services, spa, sport services, social security and so on. Key attention is further devoted to the main principle of human capital contract – transferred price. The paper analyses its characteristics and designs mechanism how transferred price should work as a convenient and useful tool of financing. The main point is that a customer of sector productive services pays through transferred price directly to its provider. At the end the paper shortly discuss main objections to transferred contract. It is shown that the objections serve as a pretext for hiding real reason that is that present systems of financing guarantees prevent providers of productive services privileges. Providers can so more easily achieve profit than in a system based on transferred price and human capital contract.

Suggested Citation

  • Radim Valenčík & Petr Wawrosz, 2015. "Transferred Price And The Sector Of Productive Services As The Key Preconditions To Smart, Sustainable, And Inclusive Growth," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 9(1), pages 179-194.
  • Handle: RePEc:isp:journl:v:9:y:2015:i:1:p:179-194
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    References listed on IDEAS

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    More about this item

    Keywords

    economic growth; human capital contract; transferred price; sectors of productive services;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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