Divisional performance measurement and transfer pricing for intangible assets

• 成果类型: Article; Proceedings Paper
• 署名作者: Johnson, Nicole Bastian
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9006-z
• 发表日期: 2006
• 页码: 339-365
• 关键词: dynamic incentives; investments; rules; RENEGOTIATION; allocation

摘要

This paper examines the effectiveness of three transfer pricing methodologies for an intangible asset that is developed through bilateral, sequential investment. In general, a royalty-based transfer price that can be renegotiated provides better investment incentives than either a non-negotiable royalty-based transfer price or a purely negotiated transfer price, and in some cases induces first-best investment. This result contrasts with previous research that finds that the inability to limit renegotiation of initial contracts reduces investment efficiency. Further, I examine how tax transfer pricing rules inform optimal internal transfer prices when the firm decouples internal and external transfer prices.