Title: System simulation across the developmental divide: toward achieving global business advantage and consumer surplus through transfer pricing

Authors: Appa Rao Korukonda, Saritha Korukonda

Addresses: Department of Computer & Management Information Systems, Academy of Business and Administrative Sciences, College of Business, Bloomsburg University of Pennsylvania, Room 247 Sutliff Hall, 400 East Second Street, Bloomsburg, PA 17815-1301, USA. ' P.O. Box 732, Bloomsburg, PA 17815, USA

Abstract: Of late, the term digital divide has been increasingly gaining currency to represent the gap between the technology haves and have-nots. The term Developmental Divide is used in this paper to represent a similar gap in development and socio-economic factors across different countries. It is argued that contrary to popular perceptions, developmental divide does not create barriers to trade, but opens up opportunities for increasing global business advantage and consumer surplus at an aggregate level. Using system simulation under different demographic and socio-economic assumptions, this argument is illustrated through the concept of Transfer Pricing and increased participation of consumers.

Keywords: transfer pricing; system simulation; differential pricing; global business; global strategy; developmental divide; consumer surplus; competitive advantage; consumer participation.

DOI: 10.1504/WREMSD.2007.014042

World Review of Entrepreneurship, Management and Sustainable Development, 2007 Vol.3 No.3/4, pp.218 - 230

Published online: 13 Jun 2007 *

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