Sustainability Implications of Earnings Management and Tax Aggressiveness on Shareholder Wealth and Stock Price Crash Risk: Evidence From Zimbabwean Companies
DOI:
https://doi.org/10.51137/wrp.ijsbe.612Keywords:
Earnings Management, Tax Aggressiveness, Stock Price Crash Risk, Discretionary Accruals, Book-Tax DifferencesAbstract
This study investigates the sustainability implications of earnings management and tax aggressiveness on shareholder wealth and stock price crash risk among Zimbabwean listed companies. Using a quantitative research design, the study integrates secondary financial data from 2015–2025 and survey responses from finance managers, auditors, and investors. Earnings management was measured through discretionary accruals, while tax aggressiveness was assessed via effective tax rates and book-tax differences. Sustainable shareholder wealth was proxied by stock returns, and stock price crash risk was evaluated using negative return skewness and down-to-up volatility ratios. Descriptive statistics, correlation analysis, panel regressions, and GARCH(1,1) models were employed to examine the relationships among the variables. Findings indicate that both earnings management and tax aggressiveness undermine sustainable shareholder wealth and increase stock price crash risk. The results highlight the sustainability risks and persistent volatility induced by these managerial practices and underscore the need for improved corporate governance, transparency, ESG-oriented reporting, and regulatory oversight in Zimbabwe’s emerging capital markets.
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