Description
Since internal transfers of intermediate products between divisions of ®rms take place under a wide range of orga-
nizational factors and their arrangement, understanding transfer pricing involves a consideration of how these factors
are arranged; that is, do they complement or ®t with each other or not. The current research experimentally investigates
the impact of complementarity of sourcing (internal versus external) and compensation structure (based on division or
®rm pro®t) on transfer pricing in the case when such prices are negotiated between the trading divisions.
doc_124240465.pdf
Since internal transfers of intermediate products between divisions of ®rms take place under a wide range of orga-
nizational factors and their arrangement, understanding transfer pricing involves a consideration of how these factors
are arranged; that is, do they complement or ®t with each other or not. The current research experimentally investigates
the impact of complementarity of sourcing (internal versus external) and compensation structure (based on division or
®rm pro®t) on transfer pricing in the case when such prices are negotiated between the trading divisions.
doc_124240465.pdf