When multinational firms export their products from a high-tax to a low-tax country, they have incentives to set lower internal prices to avoid high taxes. However, such low transfer prices may be regarded as dumping and the low-tax country can implement antidumping measures.
- Presenter
- Date
- Thursday 5 Oct 2023, 12:00 - 13:00
- Type
- Seminar
- Room
- Kitchen/Lounge E1
- Building
- E Building
This study theoretically addresses whether a tightening of transfer-price regulation induces antidumping protection, and demonstrates that possible antidumping measures complicate the welfare effects of regulating transfer pricing. Starting from low enforcement of the transfer-price regulation, a tightening of it triggers the antidumping protection and improves the welfare of the high-taxed country.
However, given that the antidumping protection is in place, a further tightening of the transfer-price regulation may worsen the high-taxed country’s welfare. If the enforcement of the regulation becomes large enough, multinational firms no longer engage in dumping.
Registration
To participate, please send an email to ae-secr@ese.eur.nl
