Tax credit rating disclosure and stock price crash risk: evidence from China

Ren X. Liang R. Cheng X. Taghizadeh-Hesary F.
2025 Emerald Publishing

Review of Accounting and Finance
2025

Purpose: This paper aims to explore the relation between tax credit rating disclosure on stock price crash risk with a focus on the energy industry. Design/methodology/approach: Using a sample of tax credit rating and financial index data of listed enterprises between 2014 and 2020, the paper conducts panel regression analysis to examine how tax credit rating disclosure affects stock crashes. Findings: This study discovered a notable negative correlation between firms’ tax credit ratings and crash risk, suggesting that companies with better tax credit ratings face lower crash risks. The supervision of managerial opportunistic behaviors and investments’ reputation is the two ways tax credit rating disclosure causes stock price crashes. The results further demonstrate that enterprises with higher tax credit ratings exert a more pronounced influence on stock crashes among state-owned enterprises (SOEs) and those characterized by less growth potential and larger operational size. Originality/value: By studying the positive signal role of tax credit rating disclosure containing unique government tax certification, this paper expands the research on stock price crash factors. It enriches the financial consequences of a flexible tax administration system.

Bad news hoarding , Corporate reputation , Information disclosure , Stock price crash risk , Tax credit rating

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School of Business, Central South University, Changsha, China
Tokai Research Institute for Environment and Sustainability (TRIES), Tokai University, Tokyo, Japan
Narxoz University, Almaty, Kazakhstan

School of Business
Tokai Research Institute for Environment and Sustainability (TRIES)
Narxoz University

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Книга Публикация научной статьи Волощук 2026 Book Publication of a scientific article 2026