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Title: |
Minority Ownership, Deferral, Perverse
Intrafirm Trade and Tariffs |
| Author: |
Kant, Chander |
| Author
Affiliation: |
Seton Hall U |
| Source: |
International Economic Journal, Spring 1995, v. 9, no. 1, pp. 19-37 |
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Publication Date: |
Spring 1995 |
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Abstract: |
When the foreign subsidiary has minority
local ownership and the MNF engages in transfer pricing, its intrafirm
exports are always from the country with the higher marginal cost.
Further, permitting deferral from home taxation of non-repatriated
foreign profits changes the nature of intrafirm trade from efficient to
perverse even when the foreign subsidiary is fully-owned by the MNF.
Intrafirm trade differs significantly from that between unrelated buyers
and sellers, and tariffs on such trade (when it is perverse) can restore
global production efficiency. |
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