ABSTRACT
It is often claimed that transfer price manipulation (TPM) is more widespread in less developed countries (LDCs) than in more developed ones (MDCs). This could be due to one or both of the following factors. First, LDCs, as compared to MDCs, may have enacted a wider array of regulations in which the recourse to TPM would allow multinational enterprises (MNEs) to soften the adverse impact of these regulations. Second, LDC governments are poorly equipped, relative to MDCs, to thwart the attempts of MNEs to TPM.
