And its worth noting why we should not necessarily assume the US figure is representative for lower income countries....https://twitter.com/MForstater/status/1116252157546827776 …
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As the US data shows - they have higher rates of intrafirm trade with advanced economies, and lower rates with emerging market and developing economies.pic.twitter.com/Bjw0pbyu9M
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And this makes sense when you think about what we are talking about e.g. trade between an Apple subsidiary in one country and an Apple subsidiary (or branch) legally incorporated in another. Its not just about Apple products (or components) crossing borders.
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Similarly e.g. when Cadbury buy cocoa beans from farmers in Ghana my guess is there is no related party transaction going on, because just buying in a country does not create a permanent establishment.
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Replying to @MForstater
Cocoa is probably bought by a procurement hub and on-sold to manufacturing subsidiaries
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Right, so there is transfer pricing between the procurement hub (e.g. in Switzerland) and the manufacturing subsidiary, but not between the farm gate and the procurement hub.
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