Mineral Economics

, Volume 32, Issue 3, pp 353–363 | Cite as

Transfer pricing and corporate social responsibility: arguments, views and agenda

  • Simplice A. AsonguEmail author
  • Joseph I. Uduji
  • Elda N. Okolo-Obasi
Original Paper


The central thesis of the paper is that multinational companies (MNC) should invest in the use of “soft” methods (socially responsible behavior) to mitigate costs in society accrued due to use of “hardcore” tax evasion tactics (transfer mispricing) to maximize profits from operations in developing countries and/or countries with weak or inefficient tax laws and tax collection institutions. Therefore, we articulate the argument of corporate social responsibility (CSR) as an indirect compensation for transfer mispricing. Our aim is not to present CSR as a solution to transfer mispricing. An analytical approach is based on a content analysis of the existing literature with emphasis on a case study. We first discuss the dark side of transfer pricing (TP), next we present the link between TP and poverty and finally we advance arguments for CSR as a compensation for transfer mispricing. While acknowledging that TP is a legal accounting practice, we argue that in light of its poverty and underdevelopment externalities, the practice per se should be a strong defence for CSR because it is also associated with schemes that deprive developing countries of the capital essential for investment in health, education and development programmes.


Corporate social responsibility Transfer pricing Extreme poverty 

JEL classification

F20 H20 M14 O11 



The authors are indebted to the editor and reviewers for constructive comments.

Compliance with ethical standards

This article does not contain any studies with human participants or animals performed by the authors

Conflict of interest

The authors declare that they have no conflict of interest.

Ethics approval and consent to participate

Not applicable.

Consent for publication

Not applicable.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  • Simplice A. Asongu
    • 1
    Email author
  • Joseph I. Uduji
    • 2
  • Elda N. Okolo-Obasi
    • 3
  1. 1.Department of Economics and Development Studies, & Centre for Economic Policy and Development Research (CEPDeR)Covenant UniversityOtaNigeria
  2. 2.Department of Marketing, Faculty of Business Administration, Enugu CampusUniversity of NigeriaNsukkaNigeria
  3. 3.Institute for Development Studies, Enugu CampusUniversity of NigeriaNsukkaNigeria

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