Transfer pricing strategies and management performance of MNEs

摘要

This paper aims to explore the adoption attitudes of internal and external motivations by multinational enterprises (MNEs) concerning transfer pricing. We conduct an empirical study on the influence of transfer pricing strategies of MNEs on the perception of the level of tax rates of host countries. This research found that Holland-based MNEs are most likely to adopt transfer pricing strategies, while Japan-based MNEs are least likely. For the purpose of reducing income tax burden, the US-based MNEs are most likely to adopt, followed by Japan-based MNEs. The Japan-based MNEs are most likely to adopt transfer pricing strategies, as due to internal motivations, followed by Holland-based MNEs. The same applies to external motivations. The MNEs managements agree that with higher tariff rates of the host country, they are more likely to adopt low quotes in transfer pricing strategies to maintain the profits in the subsidiaries of the host country. If the income tax rates of the host country are higher, the managements are more likely to adopt high quotes in transfer pricing strategies to retain profits in the host country by reducing operational performances of subsidiaries.