Dossier. The Context
Focus. The State vs. The Market?
Strategy & Entrepreneurship
Value Strategies and Cost Deductibility for Intragroup Services
The internationalization of activities is one of the most effective strategies able to generate value for business. Multinational enterprises are able to do so exploiting economies of scale, economies of scope, and geographic diversification, in order to reach the best performance along three key determinants of value: current efficiency, risk management, and innovation and learning. The intersection between means and determinants generates potential advantages that exclude each other, leading to the emergence of the key role of the strategic-organizational choices of multinational enterprises.#Transnational strategies combine the search for economies of scale, at the production level, with flexibility at the distribution level, that benefit from the advantages of arbitrage between countries. But that strategy, that exploits the centralization of processes upstream in the value chain, also leads to the emergence of the issue of intragroup services, for which the contribution to the generation of value must be considered in relation to tax issues concerning transfer pricing.