Impact of Transfer Pricing on Foreign Direct Investment in Romania

Abstract

The purpose of the study presented in this paper is to analyse the impact of transfer pricing on foreign direct investment (FDI) in Romania. For attaining this goal, we performed a simple linear regression by the least squares method to study the impact of adjustments of tax obligations in the field of transfer pricing on foreign direct investment in the period 2011-2019. We have proved, from a statistical point of view, that there is a relationship between foreign direct investment and adjustments to tax liabilities resulting from transfer pricing.