This study examines the factors influencing Korean firms' adoption of transfer pricing methods in international transfer transactions with their local subsidiaries. International transfer pricing methods are broadly classified into two categories—market-based transfer pricing methods and non-market-based transfer pricing methods—and the factors affecting the choice between these two types of international transfer pricing methods are identified as internal and external environmental elements of multinational enterprises. These environmental factors are divided into seven categories: legal and regulatory factors of the host subsidiary country, tax-related factors, political and social factors, external economic factors, internal economic factors, as well as parent firm size and the location country of the local subsidiary. The results of hypothesis testing using a probit model indicate that among the factors influencing Korean firms' international transfer pricing method decisions, only the legal and regulatory factors and external economic factors of the host subsidiary country were statistically significant, thereby supporting these research hypotheses, while the remaining hypotheses concerning tax-related factors, political and social factors, internal economic factors, parent firm size, and subsidiary location country factors were rejected. Specifically, the stricter the legal and regulatory factors of the host subsidiary country—such as trade customs, anti-dumping regulations, antitrust laws, and financial reporting requirements—the greater the tendency to use market-based transfer pricing methods for international transfer transactions. Furthermore, the higher the external economic factors of the host subsidiary country—such as import restrictions, import quotas, foreign exchange and price controls, profit remittance controls, and inflation rates—the greater the tendency to use non-market-based rather than market-based transfer pricing methods. The sample for this study consisted of 71 Korean firms located in the Gyeonggi Province region.