International Transfer Pricing for Goods and Intangible Asset Licenses in a Decentralized Multinational Corporation: Review and Extensions

We review and extend the core literature on international transfer price manipulation to avoid or evade taxes. Under negotiated transfer pricing with a viable bargaining structure, including performance evaluation disconnected from the transfer price, divisions voluntarily exchange accurate information to obtain firm-wide optimality, a result not dependent on restraint from exercising internal market power. For intangible licenses, a larger optimal profit shift for a given tax rate change strengthens incentives for transfer pricing abuse. In practice, an intangible's arm's length range is viewed as a guideline, a context where incentives for abuse materialize. Transfer pricing for intangibles obliges greater tax authority scrutiny.

GESTIÓN DE RECURSOS INTANGIBLES EN INSTITUCIONES DE EDUCACIÓN SUPERIOR

Las organizaciones se desenvuelven en entornos exigentes y competitivos creados por demandas de las sociedades y marcados por la crisis financiera mundial a la que no escapan las Instituciones de Educación Superior (IES), que están orientadas a satisfacer las necesidades del entorno y a fortalecer el flujo de información y colaboración con la sociedad. En este contexto se plantea una investigación de tipo exploratorio y descriptivo, que se considera como un primer intento por desarrollar y probar empíricamente los aspectos teóricos existentes sobre el tema. El objetivo es determinar las influencias simultáneas que ejercen los recursos intangibles sobre la gestión estratégica en las IES. Estas relaciones se evaluaron con un análisis de estructuras de covarianzas que requirió la construcción y validación de un sistema de medida adecuado para cada una de las variables objeto de estudio. Dicho análisis arrojó como resultado que sólo dos de las cuatro hipótesis planteadas son significativas, loque demuestra que los recursos intangibles Gestión del conocimiento y Reputación Organizacional, son los que influyen directamente en los procesos de gestión estratégica que realizan las IES. A partir de estos descubrimientos se dispone de referentes empíricos sobre la Gestión de Recursos Intangibles, destacando el hecho que la gestión estratégica en las IES puede mejorar sustancialmente a través de la implementación de procesos que involucren el manejo adecuado de los intangibles que poseen.

Licensing endogenous cost-reduction in a differentiated Stackelberg model

In this paper we consider a differentiated Stackelberg model, when the leader firm engages in an R&D process that gives an endogenous cost-reducing innovation. The aim is to study the licensing of the cost-reduction by a two-part tariff. By using comparative static analysis, we conclude that the degree of the differentiation of the goods plays an important role in the results. We also do a direct comparison between our model and Cournot duopoly model.

Licensing in an international market

We study the effects of entry of a foreign firm on domestic welfare in the presence of licensing, when the entrant is technologically superior to the incumbent. We show that foreign entry increases domestic welfare for sufficiently large technological differences between the firms under both fixed-fee licensing and royalty licensing.

Licensing in an international triopoly

We study the effects of entry of two foreign firms on domestic welfare in the presence of licensing, when the incumbent is technologically superior to the entrants. We consider two different situations: (i) the cost-reducing innovation is licensed to both entrants; (ii) the cost- reducing innovation is licensed to just one of the entrants. We analyse three kind of license: (lump- sum) fixed-fee; (per-unit) royalty; and two-part tariff, that is a combination of a fixed-fee and a royalty. We prove that a two part tariff is never an optimal licensing scheme for the incumbent. Moreover, (i) when the technology is licensed to the two entrants, the optimal contract consists of a licensing with only output royalty; and (ii) when the technology is licensed to just one of the entrants, the optimal contract consists of a licensing with only a fixed-fee.

Welfare effects of entry into international markets with licensing

We study the effects of entry of a foreign firm on domestic welfare in the presence of licensing, when the entrant is technologically inferior to the incumbent. We show that foreign entry increases domestic welfare for intermediate (respectively, sufficiently large) technological differences between the firms under licensing with fixed fee (respectively, output royalty).

Per-unit royalty and fixed-fee licensing in a differentiated Stackelberg model

In the present paper we consider a differentiated Stackelberg model, when the leader firm engages in an R&D process that gives an endogenous cost-reducing innovation. The aim is to study the licensing of the cost-reduction by a per-unit royalty and a fixed-fee. We analyse the implications of these types of licensing contracts over the R&D effort, the profits of the firms, the consumer surplus and the social welfare. By using comparative static analysis, we conclude that the degree of the differentiation of the goods plays an important role in the results.

A comparison of environmental licensing systems in operation in the wood panel manufacturing industry in the Northern Hemisphere

The objective of this thesis is to compare and contrast environmental licensing systems, for the wood panel industry, in a number of countries in order to determine which system is the best from an environmental and economic point of view. The thesis also examines the impact which government can have on industry and the type of licensing system in operation in a country. Initially, the thesis investigates the origins of the various environmental licensing systems which are in operation in Ireland, Scotland, Wales, France, USA and Canada. It then examines the Environmental Agencies which control and supervise industry in these countries. The impact which the type of government (i.e. unitary or federal) in charge in any particular country has on industry and the Regulatory Agency in that country is then described. Most of the mills in the thesis make a product called OSB (Oriented Strand Board) and the manufacturing process is briefly described in order to understand where the various emissions are generated. The main body of the thesis examines a number of environmental parameters which have emission limit values in the licenses examined, although not all of these parameters have emission limit values in all of the licenses. All of these parameters are used as indicators of the potential impact which the mill can have on the environment. They have been set at specific levels by the Environmental Agencies in the individual countries to control the impact of the mill. Following on from this, the two main types of air pollution control equipment (WESPs and RTOs) are described in regard to their function and capabilities. The mill licenses are then presented in the form of results tables which compare air results and water results separately. This is due to the fact that the most significant emission from this type of industry is to air. A matrix system is used to compare the licenses so that the comparison can be as objective as possible. The discussion examines all of the elements previously described and from this it was concluded that the IPC licensing system is the best from an environmental and economic point of view. It is a much more expensive system to operate than the other systems examined, but it is much more comprehensive and looks at the mill as a whole rather than fragmenting it. It was also seen that the type of environmental licensing system which is in place in a country can play a role in the locating of an industry as certain systems were seen to have more stringent standards attached to them. The type of standard in place in a country is in turn influenced by the type of government which is in place in that country.

La Revelación de información obligatoria y voluntaria (activos intangibles) en las entidades de crédito. Factores determinantes.

En esta investigación se analizan los factores que influyen en la revelación de información tanto obligatoria como voluntaria (activos intangibles) en las entidades de crédito españolas en sus informes anuales, contrastando si son diferentes los factores que influyen en la revelación de una u otra información.

Why is it so Hard to Value Intangibles? Evidence from Investments in High-Technology Start-Ups

The paper uses a range of primary-source empirical evidence to address the question: ‘why is it to hard to value intangible assets?’ The setting is venture capital investment in high technology companies. While the investors are risk specialists and financial experts, the entrepreneurs are more knowledgeable about product innovation. Thus the context lends itself to analysis within a principal-agent framework, in which information asymmetry may give rise to adverse selection, pre-contract, and moral hazard, post-contract. We examine how the investor might attenuate such problems and attach a value to such high-tech investments in what are often merely intangible assets, through expert due diligence, monitoring and control. Qualitative evidence is used to qualify the more clear cut picture provided by a principal-agent approach to a more mixed picture in which the ‘art and science’ of investment appraisal are utilised by both parties alike

Department of Commerce Iowa Professional Licensing and Regulation Division Performance Report, FY 2004

Agency Performance Report from the Professional Licensing and Regulation Division

Pilot licensing after aortic valve surgery.

Background and aim of the study: Bicuspid aortic valve is the most common congenital heart malformation, and a high percentage of patients with this condition will develop complications over time. It is rare that pilots undergo aortic valve surgery, and the confirmation of flight-licensing requirements after aortic valve replacement (AVR) is a challenge for the patient's cardiac surgeon and, particularly, for the Aeromedical Examiner (AME). Only AMEs are able to determine the flight status of pilots. Furthermore, in military and in civil aviation (e.g., Red Bull Air Race), the high G-load environment experienced by pilots is an exceptional physiological parameter, which must be considered postoperatively. Methods: A review was conducted of the aeronautical, surgical and medical literature, and of European pilot-licensing regulations. Case studies are also reported for two Swiss Air Force pilots. Results: According to European legislation, pilots can return to flight duty from the sixth postoperative month, with the following limitations: that an aortic bioprosthesis presents no restrictions in cardiac function, requires no cardioactive medications, yet requires a flight operation with co-pilot, the avoidance of accelerations over +3 Gz and, in military aviation, restricts the pilot to non-ejection-seat aircraft. The patient follow up must include both echocardiographic and rhythm assessments every six months. Mechanical prostheses cannot be certified because the required anticoagulation therapy is a disqualifying condition for pilot licensing. Conclusion: Pilot licensing after aortic valve surgery is possible, but with restrictions. The +Gz exposition is of concern in both military and civilian aviation (aerobatics). The choice of bioprosthesis type and size is determinant. Pericardial and stentless valves seem to show better flow characteristics under high-output conditions. Repetitive cardiological controls are mandatory for the early assessment of structural valve disease and rhythm disturbances. A pre-emptive timing is recommended when reoperation is indicated, without waiting for clinical manifestations of structural valve disease.

U.S. Universities’ Net Returns from Patenting and Licensing: A Quantile Regression Analysis, September 2006

In line with the rights and incentives provided by the Bayh-Dole Act of 1980, U.S. universities have increased their involvement in patenting and licensing activities through their own technology transfer offices. Only a few U.S. universities are obtaining large returns, however, whereas others are continuing with these activities despite negligible or negative returns. We assess the U.S. universities’ potential to generate returns from licensing activities by modeling and estimating quantiles of the distribution of net licensing returns conditional on some of their structural characteristics. We find limited prospects for public universities without a medical school everywhere in their distribution. Other groups of universities (private, and public with a medical school) can expect significant but still fairly modest returns only beyond the 0.9th quantile. These findings call into question the appropriateness of the revenue-generating motive for the aggressive rate of patenting and licensing by U.S. universities.

Measuring intangibles' productivity. Empirical evidence from Spanish firms

As companies and shareholders begin to note the potential repercussions of intangible assets uponbusiness results, the inability of the traditional financial statement model to reflect these new waysof creating business value has become evident. Companies have widely adopted newmanagement tools, covering in this way the inability of the traditional financial statement model toreflect these new ways of creating business value.However, there are few prior studies measuring on a quantifiable manner the level of productivityunexplained in the financial statements. In this study, we measure the effect of intangible assets onproductivity using data from Spanish firms selected randomly by size and sector over a ten-yearperiod, from 1995 to 2004. Through a sample of more than 10,000 Spanish firms we analyse towhat extent labour productivity can be explained by physical capital deepening, by quantifiedintangible capital deepening and by firm s economic efficiency (or total factor productivity PTF).Our results confirm the hypothesis that PTF weigh has increased during the period studied,especially on those firms that have experienced a significant raise in quantified intangible capital,evidencing that there are some important complementary effects between capital investment andintangible resources in the explanation of productivity growth. These results have significantdifferences considering economic sector and firm s dimension.

Ethics and creative accounting: Some empirical evidence on accounting for intangibles in Spain

Recent research shows that financial reports are losing relevance. Mainly thisis due to the growing strategic importance of intangible assets in theperformance of a company. A possible solution is to modify accounting standardsso that statements include more self-generated intangible assets, taking intoaccount with their inherent risk and difficulty of valuation. We surveyed loanofficers who were asked to assess the credit-worthiness of a hypotheticalcompany. The only information given was a simplified version of financialstatements. Half the group got statements where research and development costshad been capitalized. The other half got statements in which these costs hadbeen treated as an expense. The findings show that capitalization wassignificantly more likely to attract a positive response to a loan request. Thepaper raises the question of whether accounting for intangibles might providemanagers with one more creative accounting technique and, in consequence, itsethical implications.