Transfer Pricing and Financial Performance of Firms in Nigeria

The study was conducted to find the effect of transfer pricing on financial performance of some firms in Nigeria. The study was based on the cross-sectional design. The population comprises multinational firms operating in Nigeria across various sectors, including manufacturing, oil and gas, and telecommunications. Twenty (20) companies accessible were conveniently selected as the study sample. Using the employees of the sampled firms as respondents, one hundred questionnaires were distributed. The data collected from the usable returned questionnaires were analysed using the descriptive and linear regression to find out the relationship between the variables. The linear regression analysis clearly portrays that transfer pricing has positive and moderate significant effects on financial performance as the R square value showed 0.546 and the probability value stood at 0.000. The recommendations made are that organizations should develop well-structured transfer pricing policies to maximize financial performance and ensure that pricing strategies align with financial goals to enhance profitability; comply with tax regulations to avoid potential risks associated with aggressive transfer pricing practices, and also adopt advanced transfer pricing techniques to optimize financial performance. The study, in its conclusion, states that transfer pricing significantly improves financial performance.