An Experimental Examination of Perceptions of Fairness on Transfer Pricing Decisions and Firm Profit (original) (raw)
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Information technology, organizational design, and transfer pricing
Journal of Accounting and Economics, 2006
We show how information technology affects transfer pricing. With constrained information technology, negotiated transfer pricing has an informational advantage: managers agree to prices that approximate the firm's cost of internal trade more precisely than cost-based transfer prices. With sufficiently rapid offers, this advantage outweighs opportunity costs of managers' bargaining time, and negotiated transfer pricing generates higher profits than the cost-based method. However, as information technology improves, the informational advantage diminishes; the opportunity costs of managers' bargaining eventually dominate, and cost-based methods generate higher profits. Our results explain why firms generally prefer cost-based methods, and when negotiated methods are preferable.
JURNAL AKUNTANSI BERKELANJUTAN INDONESIA
This study aims to analyze the influence of Taxes, Exchange Rate, Profitability, and Tunneling Incentive on Company Decisions to Make Transfer Pricing in manufacturing companies. The dependent variable in the study is transfer pricing while the independent variables in this study are tax, exchange rate , profitability, and tunneling incentive .The sample was chosen using a purposive sampling method with certain criteria. In accordance with the required data, namely secondary data, this data collection method uses documentation techniques based on the 2013-2017 financial statements. So that a sample of 17 manufacturing companies can be obtained.The results of the analysis of this study indicate that taxes affect the transfer pricing decision. Exchange rates and profitability have no effect on transfer pricing decisions. While the tunneling incentive affects the transfer pricing decision .
Transfer Pricing is part of a business and taxation activity that aims to ascertain whether the prices applied in transactions between companies that have special relationships are based on the principle of fair market prices. This study aims to analyze and determine the effect of Taxes, Tunneling Incentives, Good Corporate Governance, Profitability and Bonus Mechanisms on manufacturing companies listed on the Indonesia Stock Exchange in 2018-2020. Data collection technique using purposive sampling technique. A total of 18 companies have met the criteria as a unit of observation. The analytical method used is logistic regression analysis. The research results provide case study evidence that the bonus mechanism influences transfer pricing decisions. Meanwhile, taxes, tunneling incentives, good corporate governance and profitability have no effect on transfer pricing decisions.
The Role of Transfer Price for Coordination and Control within a Firm
2000
This paper explores the role of transfer prices as coordinating mechanisms within a firm. Three cases (full information; pure adverse selection; adverse selection and moral hazard) are analyzed and compared to show how quantity and effort are affected as assumptions on observability are progrssively relaxed. The analysis of the second case, having two observable variables, identifies the necessary and sufficient
Identification of transfer pricing practices in the era of multinational company competition
Linguistics and Culture Review, 2021
This study presents the results of identifying practical transfer pricing among multinational companies operating in an era full of global competition. The study is to gain an understanding and experience of practical transfer pricing among foreign companies operating in Indonesia. Our data search was conducted on international publications. After getting the data, our in-depth data analysis efforts involve a data evaluation system, data interpretation, and coding so that the data we produce answers the study questions with the highest principles. We report this study is a descriptive qualitative data study guided by studies and evidence in the field so that we can arrange this style with a phenomenological approach, which is an effort to examine and explore the data in-depth so that we can use the data and discuss it as findings. The literature sources that we visited were complications such as Elsevier, Taylor and Francis, Google books, application, and Eric. Using keywords search...
Transfer Pricing in International Business: A Management Tool for Adding Value
2013
The increasing economic, social and political importance of trade in the modern era spawned a phenomenon called the multinational organization. These organizations, beginning with the Dutch East India Company, are capable of exercising extreme power not only in individual countries but globally. Countries, and often sub-national regions, compete vigorously against one another for the establishment of facilities for a multinational organization for they bring revenue, employment and economic activity. The only significant problem is that these organizations have a national home to where profits ultimately will have to come. In trying to bring the maximum amount of profit home, multinational organizations often engage in practices, particularly in relation to internal pricing, that frequently enrage either their host or home countries. These internal pricing activities, known more commonly as transfer pricing, have provoked reactions from national jurisdictions to monitor and modify t...
2007
Well understood in economics, accounting, finance, and legal research, transfer pricing has rarely been comprehensively explored in organization management literature. This paper explores some theoretical explanations of transfer pricing within multidivisional firms drawing insights from various organizational theories -primarily institutional theory, transaction cost economics, and social networksto develop a conceptual model of transfer pricing. This model focuses on the nature of multidivisional firms' internal transfers, internal and external technological environments, and internal and external social environments. We highlight the importance of transfer pricing as a key strategic dimension to understand intra-firm flows and their associated costs.
Determinants of Transfer Pricing
Journal of Management and Business, 2019
Transfer pricing is an effort to minimize the tax burden by allocating corporate profits to the relations company with lower tax rates. This research aimed to analyze the effect of corporate governance, tunneling incentive and sales growth to practices transfer pricing. Quantitative method and secondary data of annual report. The populations in this research are manufacturing company sector basic and chemical industrial listed on the Indonesia Stock Exchange (BEI) for years 2014-2017 totaling 13 sample companies selected by purposive sampling method.The analysis technique data used is a binary logistic regression.The results of this research indicates that the variable corporate governance and sales growth not effect on practice transfer pricing, while tunneling incentive positive effect on practice transfer pricing.
Attention to Fairness versus Profits: The Determinants of Satisficing Pricing
Journal of Management Studies, 2016
We investigate determinants of the competitive behaviour of satisficing, non-profit-maximizing pricing. Taking a behavioural approach, we argue that pricing decisions are motivated by fairness objectives as well as the desire to achieve economic objectives. We draw from the attention-based view to build our theoretical model explaining the contextual conditions that are most likely to be associated with attention to fairness relative to attention to achieving maximum profits when setting prices. Our hypothesized predictors of satisficing pricing decisions encompass the institutional context in which the firm is embedded, the exchange context with customers and suppliers, and the context internal to the firm. Hypotheses are tested with survey data of over 3,000 firms from 15 countries. We find that the decision to set prices at a satisficing level is remarkably common, and its prevalence is associated with contextual factors that are consistent with greater attention to fairness concerns.