NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Transfer Pricing Problem: Where the Profits Are

James R. Hines, Jr.

NBER Working Paper No. 3538
Issued in December 1990
NBER Program(s):Public Economics

Section 1 introduces the material. Section 2 of this paper describes the transfer pricing problem and some solutions that have been proposed in the past. Section 3 offers a different solution and demonstrates that it supports an efficient allocation of resources. Section 4 briefly discusses some of the complications that arise in practice, analyzes methods governments have employed to address this problem, and argues that the solution corresponds to concepts of income division that governments have tried to employ in broader contexts.

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Document Object Identifier (DOI): 10.3386/w3538

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