start-ver=1.4
cd-journal=joma
no-vol=32
cd-vols=
no-issue=1
article-no=
start-page=238
end-page=270
dt-received=
dt-revised=
dt-accepted=
dt-pub-year=2024
dt-pub=20240311
dt-online=
en-article=
kn-article=
en-subject=
kn-subject=
en-title=
kn-title=Attractive target for tax avoidance: trade liberalization and entry mode
en-subtitle=
kn-subtitle=
en-abstract=
kn-abstract=Growing foreign direct investments (FDIs) have been observed in parallel to the development of tax avoidance by multinational enterprises; however, empirical evidence indicates the asymmetric effects of trade costs on a firm’s entry decision. To give a new rationale and insights into the impacts of transfer pricing and trade liberalization on a firm’s global activities, this study incorporates transfer pricing and investigates a foreign firm’s entry decision: exports, greenfield FDI (GFDI), or cross-border mergers and acquisitions (CM&As). We show that CM&A is the equilibrium entry mode when transfer pricing regulation is loose, whereas the choice between exports and GFDI depends on the fixed costs of GFDI. Moreover, trade liberalization increases the likelihood of CM&A but decreases that of exports because a reduction in trade costs enhances tax-avoidance efficiency due to more intrafirm trade, implying that tax avoidance in the form of CM&A becomes crucial as globalization progresses. Our welfare analysis shows that regulating CM&A based on consumers’ benefits may result in welfare reduction because profit shifting is most effective under CM&A and a host country’s tax revenue from the foreign firm increases. The results imply the importance of considering the link between international tax and antitrust policies.
en-copyright=
kn-copyright=

en-aut-name=OkoshiHirofumi
en-aut-sei=Okoshi
en-aut-mei=Hirofumi
kn-aut-name=
kn-aut-sei=
kn-aut-mei=
aut-affil-num=1
ORCID=

affil-num=1
en-affil=Faculty of Economics, Okayama University
kn-affil=
en-keyword=Transfer price
kn-keyword=Transfer price
en-keyword=Cross-border mergers and acquisitions
kn-keyword=Cross-border mergers and acquisitions
en-keyword=Entry mode
kn-keyword=Entry mode
en-keyword=Economic integration
kn-keyword=Economic integration
en-keyword=Antitrust policy
kn-keyword=Antitrust policy
en-keyword=F23
kn-keyword=F23
en-keyword=H26
kn-keyword=H26
en-keyword=L13
kn-keyword=L13
END

start-ver=1.4
cd-journal=joma
no-vol=
cd-vols=
no-issue=
article-no=
start-page=1
end-page=
dt-received=
dt-revised=
dt-accepted=
dt-pub-year=2021
dt-pub=20210904
dt-online=
en-article=
kn-article=
en-subject=
kn-subject=
en-title=
kn-title=Tariff elimination versus tax avoidance: free trade agreements and transfer pricing
en-subtitle=
kn-subtitle=
en-abstract=
kn-abstract=We explore the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. The ROO under a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. We find that a value-added criterion of ROO restricts abusive transfer pricing by MNEs. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low- to high-tax country. Because the ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving one.
en-copyright=
kn-copyright=

en-aut-name=MukunokiHiroshi
en-aut-sei=Mukunoki
en-aut-mei=Hiroshi
kn-aut-name=
kn-aut-sei=
kn-aut-mei=
aut-affil-num=1
ORCID=

en-aut-name=OkoshiHirofumi
en-aut-sei=Okoshi
en-aut-mei=Hirofumi
kn-aut-name=
kn-aut-sei=
kn-aut-mei=
aut-affil-num=2
ORCID=

affil-num=1
en-affil=Faculty of Economics, Gakushuin University
kn-affil=

affil-num=2
en-affil=Faculty of Economics, Okayama University
kn-affil=
en-keyword=Rules of origin
kn-keyword=Rules of origin
en-keyword=Free trade agreement
kn-keyword=Free trade agreement
en-keyword=Transfer pricing
kn-keyword=Transfer pricing
en-keyword=Profit shifting
kn-keyword=Profit shifting
END

start-ver=1.4
cd-journal=joma
no-vol=52
cd-vols=
no-issue=2
article-no=
start-page=1
end-page=11
dt-received=
dt-revised=
dt-accepted=
dt-pub-year=2020
dt-pub=20201106
dt-online=
en-article=
kn-article=
en-subject=
kn-subject=
en-title=Input pricing under strategic delegation: Application of Cournot-Ikema curve
kn-title=垂直統合企業の中間財価格決定と戦略的な経営権委任：池間カーブの応用
en-subtitle=
kn-subtitle=
en-abstract=
kn-abstract=　Once a fi rm is vertically integrated, it is well-known that such a firm has an incentive to delegate quantity decision to its downstream affiliate to increase its total profits by manipulating its input price. This kind of analysis has been analytically done but this note applies Ikema's diagrammatic demonstration to the model with a vertically integrated fi rm to show how to derive the market equilibrium in "quantity-price" plane diagrammatically. First, we derive the locus that firms' optimal supplies at any price level, which is called "Cournot-Ikema curve" and derive the equilibrium point which is identifi ed with the intersection of a demand curve and the Cournot-Ikema curve. This paper fi nds that strategic delegation rotates the curve clockwise with a fixed point at a price level equal to marginal cost. Finally, our model is extended to the case that a multinational enterprise manipulates transfer price, and shows that such a tax motivated transfer price further rotates the curve.
en-copyright=
kn-copyright=

en-aut-name=
en-aut-sei=
en-aut-mei=
kn-aut-name=大越裕史
kn-aut-sei=大越
kn-aut-mei=裕史
aut-affil-num=1
ORCID=

affil-num=1
en-affil=
kn-affil=社会文化科学研究科
END