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Agency Relationship and Transfer Pricing Inefficiency
[Vztahy zastoupení a neefektivnost transferových cen]

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  • Libor Kaiser

Abstract

Transfer pricing policy is a very important activity within multinational firms. The importance of this policy has been increasing since the time of globalization has come. There are many reasons for implementing such a policy. The international capital mobility allows multinational firms to allocate capital among their subsidiaries mainly due to savings connected to the taxation policies of individual states. It is not easy to study transfer pricing because it belongs to best guarded know-how of each firm. In this article I will show possible inefficiencies of transfer pricing using an agency theory point of view.

Suggested Citation

  • Libor Kaiser, 2006. "Agency Relationship and Transfer Pricing Inefficiency [Vztahy zastoupení a neefektivnost transferových cen]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2006(3), pages 73-81.
    • Handle: RePEc:prg:jnlaop:v:2006:y:2006:i:3:id:94:p:73-81
    DOI: 10.18267/j.aop.94
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    References listed on IDEAS

    as
    1. Tim Baldenius & Stefan Reichelstein, 2006. "External and Internal Pricing in Multidivisional Firms," Journal of Accounting Research, Wiley Blackwell, vol. 44(1), pages 1-28, March.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    More about this item

    Keywords

    transfer pricing; agency theory; multinational firm; taxation policy;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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