Abstract:
Aggressive transfer pricing is identified as a core competence that is required by
multinationals to increase their competitiveness. The creation of a multinational is based
on the evolution of corporate strategy, the culmination of which is encompassed by the
internalisation theory. The main proponents of this theory is the efficient and effective
management of internalised resources through the use of internal pricing. The purposes
of this study was to establish if the possibility exists to use aggressive transfer pricing
as a means to increase the competitiveness of multinationals. A deductive research
approach was used to determine if the propositions set forth on the basis of the current
literature would hold true when analysed based on data collected. A survey
questionnaire was designed based on the literature review and submitted to
respondents electronically. The results of the data analysis supported the propositions.
The findings in this study enabled the researcher to deduce that the possibility indeed
exists for aggressive transfer pricing to be used by multinationals as a means to increase
their competitiveness.
