scholarly journals Sustainability of Public Finance through the Lens of Transfer Prices and Their Associated Risks: An Empirical Research

2021 ◽  
Vol 13 (12) ◽  
pp. 6837
Author(s):  
Mihaela Paraschiva Luca ◽  
Ileana Tache
Keyword(s):  
Quantitative Research ◽  
World Economy ◽  
Transfer Pricing ◽  
Empirical Studies ◽  
Theoretical Research ◽  
Computer Assisted ◽  
Tax Reforms ◽  
The Face ◽  
Transfer Prices ◽  
Economic Reality

At a time when the world economy is being affected by the COVID-19 pandemic, we are more aware than ever of the importance of the sustainability of public finances. This paper outlines its importance by discussing transfer prices and their fiscal associated risks. In the current economic context, marked by the crisis and by an increasing pressure from the control authorities on companies, no matter how important the theoretical research, it cannot capture very well the pulse of practical activity. Under these conditions, empirical studies are becoming increasingly important, requiring an approach to practical economic reality. In order to analyze the way in which companies that carry out transactions with affiliated parties approach the transfer prices and the risks related to them, we conducted an empirical, quantitative research using the CAWI method (Computer Assisted Web Interviewing) and the questionnaire. The research results demonstrate an awareness by the responding companies of the importance of transfer pricing and their risks, the transactions most prone to control in this area being those of financing within the group, followed equally by management services, consulting, assistance and transactions with goods. In the face of legislation that leaves room for interpretation and a high number of controls on transfer pricing, a small number of companies participating in the research have used the Advance Price Agreement as a tool to reduce the tax risk associated with transfer pricing. Companies also face uncertainty about how ongoing global tax reforms will affect them in the coming period.

scholarly journals Behavioural Economic Tools as a Way to Increase Customers’ Response in the Banking Sector

2020 ◽  
pp. 311-327
Keyword(s):  
World Economy ◽  
Banking Sector ◽  
External Factor ◽  
Empirical Studies ◽  
Behavioural Economics ◽  
Theoretical Research ◽  
Behavioural Finance ◽  
Literature Overview ◽  
Banking Market ◽  
Economic Tools

The proper functioning of the banking sector is of great importance to the national and world economy. Ever since the crisis of 2008 banks have experienced a decrease in revenue for various reasons. This decline is worrying and while external factors cannot be altered by financial institutions, their effect can be reduced with the formulation and application of a focused marketing strategy. The purpose of this article is to determine whether implementation of behavioural finance can attract customers and improve sales in a sector with seemingly decreasing potential and growing competition. The research topic is the change in customer behaviour as a result of implementing behavioural techniques (nudges). The object of analysis is a leading bank in Bulgaria and its interaction with the customers. There are three main tasks in this article: – to show how the economic crisis as an external factor has contributed to changes in regulation and consolidation on the Bulgarian banking market; – to conduct a literature overview of some of the behavioural economics aspects, which can be incorporated in banking practices; – to present the results of a Bulgarian bank, which manages to improve the outcome of its campaigns and to apply the idea behind the customer decisionmaking matrix in its marketing mix by employing the tools defined in the literature overview. There is an abundance of theoretical research on behavioural economics, far less evidence from empirical studies in various sectors and none from the banking sector. The aim of this article is to shed some light on the topic. The major assumption held in this study is that the use of behavioural finance tools in banks’ marketing policies can increase customer response rate and help increase sales.

Measurement of Vulnerability of Financial Portfolio of Sharia Commercial Banks by Cardona Method

2017 ◽  
Vol 9 (2) ◽  
pp. 109
Author(s):  
Paulina Harun ◽  
Atman Poerwokoesoemo
Keyword(s):  
Commercial Banks ◽  
Quantitative Research ◽  
Banking Sector ◽  
Banking Industry ◽  
Policy Makers ◽  
Factors Affecting ◽  
Section Data ◽  
Initial Stage ◽  
The Face ◽  
Asset Portfolio

his study aims to: (1) to know and analyze the extent of volatility (vulnerability) of sharia banking industry in Indonesia in the face of competition (2) to know and analyze factors affecting vulnerability of sharia commercial banks; (3) to know and analyze the extent of sustainable development of sharia banking industry to Indonesia's economic development.The research conducted to measure the vulnerability (volatility) of proto folio of syariah bank using observation period 2015, and the data used is cross section data. The research design used in this research is quantitative research, using asset dimension (asset portfolio, liability portfolio, equity portfolio) and stressor (pressure, including: credit risk, market risk, and liquidity risk).The activity plan of this research is: in the initial stage of conducting theoretical study related to the vulnerability related to banking especially BUS; The next step is to determine the asset and stressor dimensions associated with the BUS; Further determine the indicators related to assets and stressors; The next step performs calculations to determine the index of each BUS as well as the dimensions that affect the vulnerabilities faced by each BUS.Target expected outcomes can be generated from this research is: for the object of research (BUS) provide a solution for BUS to deal with and overcome the vulnerabilities encountered and policies that must be done. For policy makers, the results of this study are expected to provide input in decision-making and other policies.Measurement of vulnerability to be performed related to banking operations in the face of competition and the continuity of BUS in Indonesia. The outcomes of this study are expected to be included in Bank Indonesia journals, the selection of this journal is based on studies conducted in the banking sector, especially BUS in Indonesia.

Agricultural Trade and Ultra-Poor in Pakistan: An Application of CGE Model

2021 ◽  
pp. 097639962110106
Author(s):  
Saud Ahmad ◽  
Muhammad Aamir Khan ◽  
Usman Mustafa
Keyword(s):  
Income Inequality ◽  
World Economy ◽  
Empirical Studies ◽  
Real Income ◽  
Agricultural Trade ◽  
Public Welfare ◽  
Trade Policies ◽  
Agriculture Sector ◽  
Lower Extent ◽  
Potential Impact

In the modern integrated world, the synthesis of countries for trade is often viewed as a crucial source of income and growth disparities across nations. Well-known channels of economic theory can trace the growth effects of trade. However, there is a substantial conflict among empirical studies regarding gains from agricultural trade. Therefore, this study examines the economy-wide impact of agriculture trade liberalization/protection on agriculture production, agriculture trade, income redistribution and public welfare. An extension of the GTAP model known as MyGTAP is employed and the world economy is disaggregated into 20 regions and 11 sectors with Pakistan as a home country. Further, results explore greater gains from an increased level of liberalization towards the agriculture sector in terms of agriculture production, real factors’ wage, terms of trade and household welfare. Rural households enjoy relatively higher real income and income inequality declines in Pakistan in the case of liberalization and protection. However, comparatively protectionism reduces inequality by the lower extent, and said study also points out that neither change in real gross domestic product nor public welfare turns out to be a good indicator of assessing potential impact of trade policies on income inequality.

scholarly journals Substitution across profit shifting methods and the impact on thin capitalization rules

2021 ◽  
Author(s):  
Gideon Goerdt ◽  
Wolfgang Eggert
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Multinational Firm ◽  
Profit Shifting ◽  
Goods And Services ◽  
Internal Goods ◽  
Transfer Prices ◽  
Debt Shifting ◽  
The Impact ◽  
Thin Capitalization

AbstractThin capitalization rules limit firms’ ability to deduct internal interest payments from taxable income, thereby restricting debt shifting activities of multinational firms. Since multinational firms can limit their tax liability in several ways, regulation of debt shifting may have an impact on other profit shifting methods. We therefore provide a model in which a multinational firm can shift profits out of a host country by issuing internal debt from an entity located in a tax haven and by manipulating transfer prices on internal goods and services. The focus of this paper is the analysis of regulatory incentives, $$(i)$$ ( i ) if a multinational firm treats debt shifting and transfer pricing as substitutes or $$(ii)$$ ( i i ) if the methods are not directly connected. The results provide a new aspect for why hybrid thin capitalization rules are used. Our discussion in this paper explains why hybrid rules can result in improvements in welfare if multinational firms treat methods of profit shifting as substitutes.

scholarly journals Optimal utility and probability functions for agents with finite computational precision

2020 ◽  
Author(s):  
Keno Juechems ◽  
Jan Balaguer ◽  
Bernhard Spitzer ◽  
Christopher Summerfield
Keyword(s):  
Selective Pressure ◽  
Empirical Studies ◽  
Internal Representation ◽  
Simple Assumption ◽  
Probability Functions ◽  
True Value ◽  
The Face ◽  
Economic Choices ◽  
As If

When making economic choices, such as those between goods or gambles, humans act as if their internal representation of the value and probability of a prospect is distorted away from its true value. These distortions give rise to decisions which apparently fail to maximise reward, and preferences that reverse without reason. Why would humans have evolved to encode value and probability in a distorted fashion, in the face of selective pressure for reward-maximising choices? Here, we show that under the simple assumption that humans make decisions with finite computational precision – in other words, that decisions are irreducibly corrupted by noise – the distortions of value and probability displayed by humans are approximately optimal in that they maximise reward and minimise uncertainty. In two empirical studies, we manipulate factors that change the reward-maximising form of distortion, and find that in each case, humans adapt optimally to the manipulation. This work suggests an answer to the longstanding question of why humans make “irrational” economic choices.

scholarly journals Qualitative Research in COVID 19 Pandemic

2021 ◽  
Author(s):  
Abdolghani Abdollahi Mohammad ◽  
Mohammad Reza Firouzkouhi
Keyword(s):  
Qualitative Research ◽  
Social Interaction ◽  
Quantitative Research ◽  
Social Consequences ◽  
Natural Order ◽  
Medical Procedures ◽  
Epidemiological Models ◽  
Social Event ◽  
The Social ◽  
The Face

Introduction: Quantitative research is not suitable for COVID pandemic research because it does not cover the social consequences of qualitative research. COVID 19 is a social event that is important because of the disruption of the natural order of society. To defeat the disease, social interaction is needed, so qualitative research is appropriate to find the challenges and experiences of society. Therefore, due to the inconsistency of people's health behaviors with epidemiological models, people's vulnerability in epidemics, unexpected consequences or surprising results, extracting participants' experiences from medical procedures and revealing flexibility in the face of social problems, the use of qualitative research in this pandemic that will be important.

scholarly journals Corporate Income Shifting in an Era of Tax Multilateralism: The Impact of Exchange-of-Information Agreements

2021 ◽  
Vol 69 (2) ◽  
pp. 357-389
Author(s):  
Devan Mescall ◽  
Paul Nielsen
Keyword(s):  
Multinational Corporations ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Empirical Studies ◽  
Annual Reports ◽  
Income Shifting ◽  
Exchange Of Information ◽  
Pricing Rules ◽  
Using Data ◽  
The Impact

Using data from the annual reports of over 100,000 subsidiaries of multinational enterprises (MNEs) from 55 countries between 2003 and 2012, the authors of this article investigate the impact of exchange-of-information agreements ("EOI agreements") on tax-motivated income shifting. Transparency created by the signing of EOI agreements is expected to reduce the tax-motivated shifting of income by multinational corporations. Whether such agreements affect the income-shifting behaviour of multinational corporations is an unanswered question. The authors find evidence that, on average, EOI agreements do have an impact on tax-motivated income shifting. Additionally, they find that more advanced, modern EOI agreements are associated with a larger decrease in tax-motivated income shifting compared to the impact of early EOI agreements. This evidence challenges the prevalent assumption in empirical studies that EOI agreements are homogeneous. Supplemental analyses suggest that factors that affect the information asymmetry between MNEs and tax authorities, such as corporations with high levels of intangibles and tax authorities with strong transfer-pricing rules and enforcement, can diminish or enhance the effectiveness of EOI agreements in moderating tax-motivated income shifting. The evidence provided by this study shows that consideration of the tax authorities' information environment and the substance of an EOI agreement is essential when assessing the impact of such an agreement on the tax behaviour of sophisticated taxpayers such as multinational corporations.

scholarly journals Analisis Struktur Kepemilikan Perusahaan Terhadap Profitabilitas Perusahaan Makanan dan Minuman yang Terdaftar di BEI

2018 ◽  
Vol 3 (2) ◽  
pp. 85-94
Author(s):  
Heni Agustina ◽  
Djoko Soelistya
Keyword(s):  
Quantitative Research ◽  
World Economy ◽  
Institutional Ownership ◽  
Active Role ◽  
Testing Hypothesis ◽  
Managerial Ownership ◽  
Public Ownership ◽  
Financial Report ◽  
The World ◽  
Food And Beverage

Abstract: The presence of food and beverage companies currently have an active role in the world economy, where the existence of such companies did not escape from the large number of funding. The funds obtained from some shareholders. Shareholding itself consists of managerial ownership, institutional ownership, and public ownership. This research is quantitative research using observa- tion because it describes the relationships between variables through testing hypothesis. Samples taken from a population with specific criteria. The population in this study i.e. finance report food and beverage companies as much as 70 financial report of the food and beverage companies that are registered in BEI. The results in this study indicates that the managerial ownership variables have no effect on profitability, but institutional ownership and public ownership has an influence on profitability.

scholarly journals Do Government Regulations Prevent Transfer Pricing Manipulations?

2011 ◽  
Vol 4 (10) ◽  
Author(s):  
Canri Chan
Keyword(s):  
Multinational Corporations ◽  
Transfer Pricing ◽  
Cash Flows ◽  
Transfer Price ◽  
Tax Rates ◽  
Performance Measurements ◽  
Government Regulations ◽  
Transfer Prices ◽  
Profit Performance ◽  
Efficient Allocations

This study investigated the effects of government regulations and incentives on the setting of transfer prices. I found significant main effects of both variables on transfer price choices. Transfer pricing is important, particularly for Multinational Corporations (MNCs), because of increased trends toward globalization of business activities and, simultaneously, decentralization. These trends have led to increased pressures for sound internal pricing systems, specifically transfer pricing, in order for organizations to ensure optimal and efficient allocations of organization resources and to provide profit performance measurements (Tang 1992). It has generally been recognized in the literature that in order to maximize after tax cash flows, MNCs shift profits from high to low tax jurisdictions. Governments in some countries, particularly those with high tax rates, are greatly concerned as to whether or not companies attempt to avoid tax liabilities via transfer pricing manipulation, specifically in terms of trying to shift profits to lower tax jurisdictions, and have enacted laws to limit transfer price choice.

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