Working Paper
Centralized vs. De-centralized Multinationals and Taxes
Søren Bo Nielsen, Pascalis Raimondos, Guttorm Schjelderup
CESifo, Munich, 2005
CESifo Working Paper No. 1586
CESifo, Munich, 2005
CESifo Working Paper No. 1586
![](https://cesifo.org/DocImg/cesifo1_wp1586.jpg?c=1689236919)
The paper examines how country tax differences affect a multinational enterprise’s choice to centralize or de-centralize its decision structure. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in MNEs - here, as a strategic pre-commitment device and a tax manipulation instrument -, we show that (de-)centralized decisions are more profitable when tax differentials are (small) large.
CESifo Category
Public Finance
Public Finance
Keywords: centralized vs. de-centralized decisions, taxes, MNEs
JEL Classification: F230,H250,L230