Formula apportionment and transfer pricing under oligopolistic competition

Nielsen, S. B., Raimondos-Møller, Pascalis, & Schjelderup, G. (2003) Formula apportionment and transfer pricing under oligopolistic competition. Journal of Public Economic Theory, 5(2), pp. 419-437.

View at publisher


This paper demonstrates that under conditions of imperfect (oligopolistic) competition, a transition from separate accounting (SA) to formula apportionment (FA) does not eliminate the problem of profit shifting via transfer pricing. In particular, if affiliates of a multinational firm face oligopolistic competition, it is beneficial for the multinational to manipulate transfer prices for tax–saving as well as strategic reasons under both FA and SA. The analysis shows that a switch from SA rules to FA rules may actually strengthen profit shifting activities by multinationals.

Impact and interest:

28 citations in Scopus
Search Google Scholar™

Citation counts are sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

ID Code: 94020
Item Type: Journal Article
Refereed: Yes
DOI: 10.1111/1467-9779.00140
ISSN: 1097-3923
Copyright Owner: Copyright 2003 Wiley-Blackwell Publishing, Inc.
Deposited On: 23 Mar 2016 01:29
Last Modified: 23 Mar 2016 01:29

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page