Corporate environments and international transfer pricing : an empirical study of China in a developing economy framework
Document Type
Journal article
Source Publication
Accounting and Business Research
Publication Date
1-1-2001
Volume
31
Issue
2
First Page
103
Last Page
118
Publisher
Routledge
Abstract
This paper investigates the international transfer pricing methods adopted by multinational corporations (MNCs) in China and how their choices are affected by specific corporate attributes in the context of the business environment in China. Empirical test results based on structured interviews indicate that MNCs having a local (Chinese) partner in management tend to adopt market-based transfer pricing methods. The influence of local partners on the choice of transfer pricing methods is modified by the impact of the source of foreign investment, as US-sourced MNCs are more likely to use cost-based pricing methods for international transfers. The influences of these 2 variables on the choice of transfer pricing methods are significant both directly and indirectly. There is also some evidence that export-oriented enterprises are more likely to adopt cost-based transfer pricing than those aiming at China's domestic markets.
DOI
10.1080/00014788.2001.9729605
Print ISSN
00014788
E-ISSN
21594260
Publisher Statement
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Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Chan, K. H., & Chow, L. (2001). Corporate environments and international transfer pricing: An empirical study of China in a developing economy framework. Accounting and Business Research, 31(2), 103-118. doi: 10.1080/00014788.2001.9729605