Integrating Managerial and Tax Objectives in Transfer Pricing

By Tim Baldenius, Nahum D. Melumad, Stefan Reichelstein. 2004

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Transfer Pricing: Strategies, Practices, and Tax Minimization (2017, background): “However, broader views of tax strategy (e.g., Scholes and Wolfson 1992) suggest such one-dimensional analyses ignore other uses of the transfer prices, e.g., to support decentralization and coordination (Baldenius et al. 2004).”
Transfer Pricing by U.S.-Based Multinational Firms (2008, background): “Similarly, Baldenius et al. (2004) develop a model with two types of transfer prices and consider the effects of cost-based and market-based transfer pricing.12 The model we develop below is a generalization of this two-price approach.”
Transfer Pricing by Multinational Firms: New Evidence from Foreign Firm Ownerships (2016, background): “In addition, δ could capture the mechanisms highlighted in the tax literature for why intra-firm prices may differ from arm’s length prices even when there are no tax rate differences across countries (Keuschnigg and Devereux, 2013; Baldenius, Melumad, and Reichelstein, 2004).”
An Economic Perspective on Transfer Pricing (2006, unknown): “Additional complications arise if the transfer price limits are endogenous (Samuelson, 1982), if the firms can make specific investments before transfers take place (Bastian Johnson, 2006; Sansing, 1999; Smith, 2002a), or if the intermediate product is sold in a separate market with imperfect market”