Tax avoidance, disclosure quality and risk of future stock price crash: Using a structural equation approach

The purpose of this research is to investigate the impact of tax avoidance on the risk of future stock price fall considering the mediating role of disclosure quality. The current research is an applied and semi-experimental research, and its methodology is also post-event. The statistical sample of the research includes 108 companies admitted to the Tehran Stock Exchange, which were investigated during the years 1386 to 1401. In order to test the research hypotheses, structural equation modeling has been used using the partial least squares (PLS) method. The results of the analysis of the research hypotheses show that among the two criteria used to measure tax avoidance (including the effective tax rate and the tax book difference), only the effective tax rate has a significant effect on the risk of the future fall in stock prices. In general, the results of this research indicate the significance of the partial mediating role of disclosure quality on the relationship between tax avoidance (effective tax rate) and the risk of future stock price fall.