Zimmerman (1995) notes that the two most frequently observed transfer pricing methods are market price transfer pricing and full cost transfer pricing. Under the …rst of these, the transfer price observed by the local manager is the marginal cost plus a markup over marginal cost which re‡ects the price elasticity of demand of the product in an external market. This markup will be denoted j and ...

Identification of the strength of human capital externalities at the aggregate level is still not fully understood. The existing method may yield positive or negative externalities even if wages reflect marginal social products. We propose an approach that yields positive average human capital externalities if and only if the marginal social product of workers with above-average human capital e...

In this study, we focused on new product move as a form of corporate entrepreneurial activity. We developed hypotheses relating the characteristics of the top management team (TMT) to the order and timing of new product moves made by firms. We analyzed 223 new product introduction moves from the personal computer, long distance telecommunication, and brewing industries from the period of 1975–1...

A number of empirical studies document that marginal cost shocks are not fully passed through to prices at the firm level and that prices are substantially less volatile than costs. We show that in the relative-deep-habits model of Ravn, Schmitt-Grohe, and Uribe (2006), firm-specific marginal cost shocks are not fully passed through to product prices. That is, in response to a firm-specific inc...

This paper presents an oligopoly model of multiproduct firms in which firms are endowed with possibly different marginal cost and product quality, and choose product ranges before product market competition. Consistent with empirical evidence on a positive relationship between firm size and product diversification, the analysis suggests that firms with higher quality-cost margins typically have...

By using a quantum probabilistic approach we obtain a description of the extreme points of the convex set of all joint probability distributions on the product of two standard Borel spaces with fixed marginal distributions.

Part 1 of this paper (http://www.paecon.net/PAEReview/issue59/Moseley59.pdf) argued that the marginal productivity theory of distribution has fundamental and insoluble logical problems: (1) the aggregate production function is not a legitimate concept, because capital consists of diverse buildings and equipment that cannot be reasonably aggregated into a total quantity for the economy as a whol...

Multinationals often serve foreign markets by producing domestically and exporting as well as by investing directly in foreign production facilities. We argue that if the multinational competes in an oligopolistic market characterized by strategic complements then there are strategic reasons to use two production facilities -committing to a second source allows the firm to keep average cost low...