Graduation Year

Spring 2014

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Marc Massoud

Reader 2

Nicholas Warner

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Terms of Use for work posted in Scholarship@Claremont.

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© 2014 Daphni Lappas-Grigoraki


This paper will discuss the obstacles governments of developing countries face in regulating related party transactions in this rapidly globalizing world. The first section of this paper will focus on foreign direct investment, its benefits, and the tax incentives instituted by developing countries to attract the capital of multinational corporations. Next, this paper will examine the major obstacles to growth a developing country must combat: shadow economies and corruption. These two enemies of growth hurt a developing country’s ability to attract foreign direct investment, to develop its rule of law and tax administration, and to efficiently allocate its resources with the goal of developing a stable economy. Finally, I will explain the difficulties developing countries must overcome to regulate firm transfer pricing under the current global standard.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.