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| Author: | Gabrielsen, T. Schjelderup, G. |
| Title: | Transfer pricing and ownership structure |
| Journal: | Scandinavian journal of economics
1999 : VOL. 101:4, p. 673-688 |
| Index terms: | ECONOMICS PRICING TRANSFER PRICING |
| Language: | eng |
| Abstract: | The authors study the performance of jointly owned production unites where firms sell inputs to a downstream final market producer. It is found that, compared to integrated firms, coownership leads to overinvoicing of input prices (transfer prices), resulting in lower aggregate profits. Tax and tariff policy may lessen the organizational inefficiencies of jointly owned firms. The analysis suggests that firms must have other reasons for forming jointly owned production units than those guided by production efficiency and benefits from delegation of decision-making. |
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