Centralized vs. de-centralized multinationals and taxes
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- Discussion papers (SAM) 
The paper examines how country tax differences affect a multinational enterprise’s choice to centralize or de-centralize its decision structure. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in MNEs — here, as a strategic pre-commitment device and a tax manipulation instrument —, we show that (de-)centralized decisions are more profitable when tax differentials are (small) large.
UtgiverNorwegian School of Economics and Business Administration. Department of Economics