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Multinational firms, transfer pricing and markups

Paris School of Economics - PARIS - 2020

This project will revolve around the idea that multinational firms echibit larger markups than standalone firms, which can offer them a competitive advantage on markets, therefore resulting in higher market power. We also know that multinational firms use the tax systems of the countries in which they operate to reduce their tax burden. These higher markups and hence this higher productivity, could therefore come from the profit shifting behavior of firms. I will address questions related to the productivity advantage of multinational firms, through the lens of profit shifting.