Transfer Pricing and Financial Performance of Listed Multinational Manufacturing Companies in Nigeria

The question of the efficiency of transfer pricing in contributing to the economic success of the multinational firms in Nigeria motivated this study. The primary purpose of this study was to investigate the influence of transfer pricing on the financial performance of listed multinational manufacturing companies in Nigeria. The study utilised 12 international manufacturing companies listed on the Nigerian Exchange Group between 2013 and 2022, using an ex post facto research design and census sampling method. The panel data regression random effect analysis was adopted. Findings revealed that board size had a significant negative impact on return on assets; board independence showed an insignificant positive relationship with ROA; related party transactions disclosed a significant positive association with ROA. Nonetheless, board size showed an insignificant negative impact on Tobin's Q; board independence still presented a significant positive relationship with Tobin's Q; related party transactions indicated an immaterial negative association with firm value. However, the study concluded that the overall results showed that transfer pricing mechanisms significantly influence the financial performance of the listed companies. The study, therefore, recommended that managements of multinational firms strictly utilise transfer pricing to fulfil the financial requirements of their entities to enhance corporate economic growth.