Profit Transferring of Multinational Enterprises in the Chinese Industry by Transfer Pricing

DOI

10.2991/ictim-17.2017.62How to use a DOI?

Keywords

Transfer pricing, transferring profit, China, multinational enterprises

Abstract

Decentralized enterprises, such as multinational enterprises (MNEs), adopt transfer prices to coordinate the strategies of the operating functional divisions and marketing divisions in a multinational environment. This paper analyzes the existence of profit transfer though transfer pricing among MNEs in China, and employs quantitative analysis to evaluate the amount of profit that is transferred by this mechanism in the Chinese industry. The contradiction between MNEs' abundant advantages of operating in China and their abnormal low profit margins indicate the existence of profit transfer behavior. The quantitative analysis shows that in the industry, there is more than 300 billion yuan, one fifth of their net profit, transferred yearly outside China and causes 4.9% decline of the total net profit of the Chinese industry from 2012 to 2015.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yuqi Sun
AU  - Jingwen Li
AU  - Xiaosong Zheng
PY  - 2017/09
DA  - 2017/09
TI  - Profit Transferring of Multinational Enterprises in the Chinese Industry by Transfer Pricing
BT  - Proceedings of the International Conference on Transformations and Innovations in Management (ICTIM 2017)
PB  - Atlantis Press
SP  - 811
EP  - 824
SN  - 2352-5428
UR  - https://doi.org/10.2991/ictim-17.2017.62
DO  - 10.2991/ictim-17.2017.62
ID  - Sun2017/09
ER  -