External And Internal Pricing In Multidivisional Firms PDF Download
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| Author | : Tim Baldenius |
| Publisher | : |
| Total Pages | : 43 |
| Release | : 2011 |
| Genre | : |
| ISBN | : |
Download External and Internal Pricing in Multidivisional Firms Book in PDF, ePub and Kindle
Multidivisional firms frequently rely on external market prices in order to value internal transactions across profit centers. This paper examines the transfer pricing problem in a setting in which an upstream division has monopoly power in selling a proprietary component both to a downstream division within the same firm and to external customers. When internal transfers are valued at the prevailing market price, the resulting transactions are distorted by double marginalization. We ask whether the imposition of intracompany discounts can alleviate or even eliminate the effects of double marginalization. When the production capacity of the upstream division is effectively unconstrained, we find that discounts will increase the firm's overall profit only under certain conditions. At the same time, it is impossible for any discount rule to induce prices and sales quantities that fully maximize the firm's corporate profit. In contrast, if the production capacity of the selling division is constrained, suitably chosen discounts will always improve the firm's overall profit relative to a policy under which internal transfers are valued at the market price. With constrained capacity, we identify conditions under which discounts set inversely to the external price elasticity of demand can fully eliminate the double marginalization problem and thereby achieve efficient decentralization.
| Author | : Tim Baldenius |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 2003 |
| Genre | : Transfer pricing |
| ISBN | : |
Download External and Internal Pricing in Multidivisional Firms Book in PDF, ePub and Kindle
| Author | : Tim Baldenius |
| Publisher | : Now Publishers Inc |
| Total Pages | : 107 |
| Release | : 2009 |
| Genre | : Business & Economics |
| ISBN | : 1601982704 |
Download Internal Pricing Book in PDF, ePub and Kindle
Internal Pricing surveys of the transfer pricing literature with a focus on commonly-used pricing schemes using incomplete contracting models. Chapter 2 develops the basic symmetric information model to compare the performance of cost-based and negotiated pricing in the absence of external input markets. Chapter 3 considers market-based pricing and the role of internal price adjustments; it ignores investments and focuses solely on trading incentives. Chapter 4 adds investments to the model of Chapter 3 and shows that investment opportunities further strengthen the case for internal adjustments. Chapter 5 reconsiders the initial analysis of Chapter 2 for the case of asymmetrically informed divisional managers. The book ends with the author's conclusions and an appendix including the mathematical proofs. A key theme running through Internal Pricing is that the firm's central office (i.e headquarters) plays a rather limited role in mediating individual transactions. This captures the stylized empirical fact that in most firms, headquarters designs the broad "rules of the game" by choosing a pricing mechanism and compensation contracts, but usually does not get involved in pricing on a product-by-product basis.
| Author | : Wolfgang Schön |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 308 |
| Release | : 2012-02-15 |
| Genre | : Law |
| ISBN | : 3642259804 |
Download Fundamentals of International Transfer Pricing in Law and Economics Book in PDF, ePub and Kindle
The taxation of multinational corporate groups has become a major concern in the academic and political debate on the future of international taxation. In particular the arm’s length standard for the determination of transfer prices is under increasing pressure. Many countries and international bodies are now taking a closer look at the use of transfer prices for profit shifting and are exploring alternative mechanisms such as formulary apportionment for the allocation of taxing rights. With regard to this topic, this volume is the first to offer a concise analysis of transfer pricing in the international tax arena from an interdisciplinary legal and economic point of view. Fundamentals such as the efficient allocation of resources within multi-unit firms and distortions between different goals of transfer pricing as well as different aspects of it in tax and corporate law, the traditional OECD approach and practical aspects concerning intangibles, capital and risk allocation are covered by outstanding authors.
| Author | : Peter Schuster |
| Publisher | : Springer |
| Total Pages | : 78 |
| Release | : 2015-02-13 |
| Genre | : Business & Economics |
| ISBN | : 3319147501 |
Download Transfer Prices and Management Accounting Book in PDF, ePub and Kindle
Transfer prices are of dominant importance in company practice and a decentralised organisation, e.g. a profit centre-organisation, is most-widely used. This textbook takes an innovative controversial approach by looking at functions of transfer prices and how different types of transfer prices can fulfil them. Suggestions common in other textbooks will be picked up and it will be shown why they do not contribute to solve the problems companies face. With support of numerous examples and exercises a conceptual understanding of this most relevant management topic will be developed. Transfer prices are an issue in most advanced courses on Management Accounting and/or Management Control and their analysis receives increasing attention. They are covered in one chapter in almost all management accounting textbooks. This often leads to serious oversimplifications and reductions of contents. This books aims at filling this gap and to provide a concise and controversial view on the topic.
| Author | : Messaoud Mehafdi |
| Publisher | : |
| Total Pages | : |
| Release | : 2000 |
| Genre | : |
| ISBN | : |
Download Internal Trade and Transfer Pricing in Large British Multi-Divisional Companies Book in PDF, ePub and Kindle
This paper offers organisational and behavioural insights into British domestic transfer pricing practice on a sample of 33 large manufacturing companies. Company practice is related to organisational characteristics, business strategy, divisional autonomy and management control. The findings indicate that high volumes of transfers are associated with certain industry sectors, the pattern of diversification and, to a lesser extent, with divisionalisation structure. The transfer pricing system is an integral part of the management control process in the multi-divisional company regardless of the level of internal trade. Restrictions on external sourcing (or the make-or-buy decision) of the transferred product, and mandated transfer prices are also found to be associated with high levels of internal trade and product idiosyncrasy. In their choice of transfer pricing policy, companies show a clear preference for market-oriented pricing, simplicity in determining specific prices, and adaptation of policies to change.
| Author | : Robert S. Gibbons |
| Publisher | : Princeton University Press |
| Total Pages | : 1248 |
| Release | : 2013 |
| Genre | : Business & Economics |
| ISBN | : 0691132798 |
Download The Handbook of Organizational Economics Book in PDF, ePub and Kindle
(E-book available via MyiLibrary) In even the most market-oriented economies, most economic transactions occur not in markets but inside managed organizations, particularly business firms. Organizational economics seeks to understand the nature and workings of such organizations and their impact on economic performance. The Handbook of Organizational Economics surveys the major theories, evidence, and methods used in the field. It displays the breadth of topics in organizational economics, including the roles of individuals and groups in organizations, organizational structures and processes, the boundaries of the firm, contracts between and within firms, and more.
| Author | : Anil Arya |
| Publisher | : Now Publishers Inc |
| Total Pages | : 109 |
| Release | : 2010 |
| Genre | : Business & Economics |
| ISBN | : 1601984022 |
Download Input Markets and the Strategic Organization of the Firm Book in PDF, ePub and Kindle
Input Markets and the Strategic Organization of the Firm addresses the question of how strategic firm organization and accounting measurements affect and are affected by such prevalent concerns of relying on an external input supplier.
| Author | : Alan M. Rugman |
| Publisher | : Taylor & Francis |
| Total Pages | : 464 |
| Release | : 2002 |
| Genre | : Business & Economics |
| ISBN | : 9780415247122 |
Download International Business: Theory of the multinational enterprise Book in PDF, ePub and Kindle
| Author | : Michael A. Hitt |
| Publisher | : Oxford University Press |
| Total Pages | : 553 |
| Release | : 2017-02-02 |
| Genre | : Business & Economics |
| ISBN | : 0190664908 |
Download The Oxford Handbook of Strategy Implementation Book in PDF, ePub and Kindle
Many strategies fail not because they are improperly formulated but because they are poorly implemented. The Oxford Handbook of Strategy Implementation examines the crucial role of implementation in how business and managerial strategies produce returns. In this wide-ranging collection of essays, leading scholars address governance, resources, human capital, and accounting-based control systems, advancing our understanding of strategy implementation and identifying opportunities for future research on this important process.
