Supply Chain Strategies and International Tax Arbitrage

What motivates the geographic footprint of the supply chains that multinational firms (MNFs) deploy? Traditional research in the operations and supply chain management literature tends to recommend locations primarily based on differentials in production costs and the ramifications of physical distance ignoring the role of taxation. MNFs that strategically position parts of their supply chains in low‐tax locations can allocate the profits across the divisions to improve post‐tax profits. For the profit allocation to be defensible to tax authorities, the divisional operations must possess real decision authority and bear meaningful risks. Generally speaking, the greater the transfer of risk and control, the larger the allowable allocation of profit. These transfers may also create inefficiencies due to misalignment of business goals and attitudes toward risk. We model these trade‐offs in the context of placing in a low‐tax region a subsidiary that oversees product distribution (as a limited risk distributor commissionnaire, limited risk distributor, or fully fledged distributor). Our analysis demonstrates that the MNF's preferences regarding the operating structures are not necessarily an obvious ordering based on the amount of risk and decision authority transferred to the division in the low‐tax jurisdiction. We derive and analyze threshold values of the performance parameters that describe the main trade‐offs involved in selecting an operating structure. We find some of the optimal decisions to exhibit interesting non‐monotone behavior. For instance, profits can increase when the tax rate in the low‐tax jurisdiction increases. Numerical analysis shows that the Limited‐Risk Distributor structure is rarely optimal and quantifies when each alternative dominates it.     

Transfer Pricing and Sourcing Strategies for Multinational Firms

Taking advantage of low tax rates using transfer pricing and taking advantage of low production costs using offshoring are two strategies multinational firms (MNFs) use to increase profits. We identify an important trade‐off that MNFs face in setting their transfer prices: the conflict between (i) the incentive role and (ii) the tax role of the transfer price. For MNFs, we find the profit‐maximizing transfer‐pricing strategies that motivate divisional management to (i) make good sourcing decisions and (ii) take advantage of favorable tax rates. We quantify the absolute and relative maximum inefficiency in terms of the after‐tax MNF's profit change from using a single transfer‐pricing system as compared to the dual transfer‐pricing system. We show that the highest relative loss is attained when the average sourcing cost and the tax differential are high. We demonstrate that the highest absolute loss is attained when the average outsourcing cost is approximately equal to the offshoring cost. We extend our results to two practical variations in MNF structures: an MNF that faces operational constraints on its offshoring capacity and an MNF that uses compensation contracts linked to after‐tax firm‐wide profits. Our insights help MNFs' managers identify when to use single and dual transfer‐pricing systems.     

Family Health History Tools as Communication Resources: Perspectives from Caucasian,Hispanic, and Pacific Islander Families

Many tools facilitate gathering family health history (FHH) information. Public health initiatives have focused on improving FHH communication. Research indicates that tools remain largely unused in non-clinical settings and people tend to refrain from engaging in FHH communication. Research also indicates that cultural and family relationship factors influence FHH communication and tool use. This study investigated FHH tools as resources for FHH communication within Caucasian, Hispanic, and Pacific Islander families. Interviews with 10 family dyads from each racial/ethnic group included opportunities for participants to evaluate two FHH tools. Using structurating activity theory, the qualitative analysis revealed that participants viewed the tools as a structure for FHH information, a guide for how to communicate about FHH, and a source for stories about family health. Results are discussed in terms of how family system elements and social structures shape perceptions and use of FHH tools. Conclusions include implications for research and practice.     

A Girl Is a Girl,Is a Girl,Is a Girl

ABSTRACT

Before I did not know I was the other in my country, before I did not know it was not safe to be the other in this, before I did not know my existence was a series of ellipses, owing to mispronunciations and a smothering absence of words, before I did not know that the past will, unfailingly, be subsumed by its past and fantasies of a future will become present torments, before I did not know all of that, I did not know I was to be a woman. … Thirty-odd years in, having married a man and birthed children, I was made to look at myself and pronounce the most foreign of words. The sound was deafening. The sound left me speechless. These writings are an attempt at puncturing the silence enveloping the most dangerous of (my) words.     

‘What I Want and What You Want’: Children's Thinking about Competing Personal Preferences

This study examined how children reason about competing personal preferences. Seventy‐two participants (mean ages 5 years 5 months, 10 years 4 months, and 17 years 7 months) considered three hypothetical scenarios in which a protagonist's personal preference was in conflict with her or his friend's personal preference. Scenarios varied in the relative weightiness of each character's desires. Whereas 5‐ and 10‐year‐olds prioritized the friend's preference across scenarios, 17‐year‐olds affirmed the character's prerogative to act according to her or his own preference except when the friend's preference was weightier. Nevertheless, regardless of age, participants generally reasoned about these situations in terms of autonomy and friendship rather than as moral obligations. The findings contribute to our understanding of how children of different ages work out the boundaries of the personal.