Open AccessInternal and external factors on firms’ transfer pricing decisions: insights from organization studies
Author(s) -
Dan Li,
Manuel Portugal Ferreira
Publication year - 2008
Publication title -
notas económicas/notas económicas
Language(s) - English
Resource type - Journals
eISSN - 2183-203X
pISSN - 0872-4733
DOI - 10.14195/2183-203x_27_2
Subject(s) - transaction cost , transfer pricing , industrial organization , dimension (graph theory) , business , knowledge transfer , key (lock) , organizational economics , economics , knowledge management , microeconomics , management , computer science , finance , mathematics , computer security , multinational corporation , pure mathematics
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 networks – to 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.