Transfer Price Setting in Multinational Corporations
Hannah Wong, Sia Nassiripour, Raza Mir,William Healy

Abstract
The globalization of the world economy in recent years has resulted in the rapid growth of multinational corporations (MNCs) and inter-company transfer of goods and services. The World Trade Organization (WTO) estimates that 50% of international trade are within multinational corporations. As a result, transfer pricing has become a more and more important issue for managers, tax authorities, and the accounting profession. This paper explores the role of transfer pricing in multinational corporations and the appropriate approach for transfer price setting. We found that different characteristics of MNCs call for varying management approaches for transfer price setting processes.

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