Arm's Length Pricing

Arm's Length Pricing and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Arm's Length Pricing: The price at which a particular product or service would sell in a transaction between unrelated buyers and sellers. It is the functional opposite of “transfer pricing,” in which the buyer and seller are related –for example, as affiliated units of a multinational corporation –and the price is influenced accordingly.