Lorraine Eden (Texas A&M, School of Management) has posted Went for Cost, Priced at Cost? An Economic Approach to the Transfer Pricing of Offshored Business Services on SSRN.  Here is the abstract:

What are the transfer pricing implications of the rapid growth in Offshored business services? In this paper, I explore the recent trend to offshoring business services, using a case study of the teleservices industry. Teleservices firms own foreign subsidiaries that provide inbound and outbound call services to third party clients. I explore the "facts and circumstances" of the industry and use economic analysis to develop transfer pricing rules for their offshored call centers. Even though the mantra, "Went for cost, Stayed for quality", applies in teleservices as in other offshored business services, I conclude "Went for cost, Priced at cost" remains the appropriate transfer pricing mantra for tax authorities and transnational corporations to follow.