قیمت نقل و انتقالات غیرقابل مشاهده
Abstract
۱٫ Introduction
۲٫ Model
۳٫ Analysis
۴٫ Discussion
۵٫ Conclusion
Conflicts of interest
Acknowledgement
Appendix A. Appendix
References
Abstract
This study investigates the optimal level of transfer prices chosen by managers in a divisionalized firm when they are evaluated based on a balanced scorecard. A unique assumption of our model is that transfer prices are unobservable to a competing firm’s managers. In contrast to the findings in several studies that examine strategic transfer pricing, this research shows that a manager who is evaluated using a balanced scorecard chooses a transfer price that exceeds marginal cost given a market competitor in a specific economic environment. This result is caused mainly by our model’s assumption that a manager considers the competitor’s profit in his/her in decision-making when the objective is to maximize long-term profit. This study makes a significant contribution to the strategic transfer pricing literature by showing that even if the transfer price is unobservable to rivals, the optimal transfer price exceeds marginal cost when the final product market is characterized by price competition, something not shown in previous analytical accounting research.
Introduction
Transfer prices have become a critically important issue for multidivisional firms. For example, General Motors and Panasonic use effective transfer prices to optimize their divisional operations and profits based on the principle that transfer prices allow managers to evaluate a manufacturing division’s performance as a profit center. While multidivisional firms attempt to effectively and accurately evaluate divisional performance using transfer pricing, it is often difficult to determine the optimal transfer price in a firm composed of multiple divisions. Because firms are generally interested in determining the optimal transfer price in a specific economic environment, transfer pricing is a practical and important issue in contemporary management accounting. Further, methods of optimal transfer pricing have been explored and proposed in empirical research from a management accounting perspective because selecting the optimal transfer price can improve a firm’s profit (e.g., Chan & Lo, 2004; Tang, 1992). Economic analysis of transfer pricing from a managerial viewpoint dates back to Hirshleifer (1956), who advocates that an internal transfer price equal to marginal cost alleviates any attendant double marginalization problem. Since Hirshleifer’s (1956) work, other management accounting studies have analyzed optimal transfer prices using market competition models (e.g., Alles & Datar, 1998; Arya & Mittendorf, 2007; Autrey & Bova, 2012; Fjell & Foros, 2008; Göx, 2000; Hamamura, 2018; Matsui, 2011, 2012, 2013; Narayanan & Smith, 2000; Schjelderup & Sørgard, 1997; Shor & Chen, 2009). Most studies in this research stream examine which cost-based transfer price, other than marginal cost, is desirable for a firm (e.g., Alles & Datar, 1998; Matsui, 2011, 2013). Tang (1992) provides important empirical evidence on transfer pricing practices, specifically the relationship between transfer prices and the use of a cost accounting system. Tang (1992) describes only a few situations where firms choose marginal cost to set transfer prices, which is unlike the theoretical insight gained in Hirshleifer (1956).