Abstract: Background: In today's international business, transfer pricing risk is critical for governments and policyholders, which focus much of the debate around compliance on offshoring and tax avoidance. This study hypothesizes about the level of transfer pricing risk, ceteris paribus, as a consequence of firms robust or weak internal corporate governance. Materials and Methods: Using a sample of 1466 parent firms, selected from 25 countries, we develop an effective measure of transfer pricing risk and examine how responsive it is to firms internal governance structures. We control our empirical......
Key words: Transfer pricing; corporate governance; risk management theory
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