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What Is a Transfer Price, and Can a Government Regulate

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Essay

What is a transfer price, and can a government regulate it? What difficulties and motives does a parent multinational firm face in setting transfer prices?


Definitions:

Bailee

The person acquiring possession of personal property in a bailment.

Gratuitous Bailment

A situation where property is voluntarily transferred into another's custody without expectation of payment.

Stradivarius

A type of high-quality stringed instrument made by members of the Stradivari family, particularly renowned violins.

Bailor

The party in a bailment who temporarily transfers possession but not ownership of a property to another party, the bailee.

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