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Tax Aggressiveness and Market Performance of Listed Insurance Companies in Nigeria

Author

Listed:
  • Bamigboye Emmanuel Adeyinka

    (Department of Accounting, Afe-Babalola University, Ado- Ekiti, Ekiti State, Nigeria.)

  • Awotomilusi Niyi Solomon

    (Department of Accounting, Afe-Babalola University, Ado- Ekiti, Ekiti State, Nigeria.)

  • Adebola Abass Jabar

    (Department of Accounting, Afe-Babalola University, Ado- Ekiti, Ekiti State, Nigeria.)

Abstract

This study examined the effect of tax aggressiveness on the market performance of listed insurance companies in Nigeria from 2012 to 2024. An ex post facto research design was adopted, and market performance was represented by Tobin's Q and Market Value per Share, while tax aggressiveness was measured using the Effective Tax Rate, Cash Effective Tax Rate, Book–Tax Difference, and Tax Savings Ratio. Pooled ordinary least squares and firm-clustered fixed-effects estimations were applied. The Tobin's Q model was statistically significant overall (Wald chi-square = 4.65, p = 0.001), although its explanatory power was low (R² = 0.089). Book–Tax Difference had a negative and statistically significant effect on Tobin's Q (coefficient = −0.999, p = 0.001), whereas the Tax Savings Ratio had a positive and statistically significant effect (coefficient = 0.057, p = 0.013). The Market Value per Share model was also statistically significant overall (Wald chi-square = 5.84, p = 0.007), with low explanatory power (R² = 0.050). In that model, the Tax Savings Ratio had a negative and statistically significant effect (coefficient = −0.462, p = 0.030), while the other tax-aggressiveness measures were not statistically significant. The findings indicate that market responses may differ between opaque book–tax positions and tax-saving outcomes. Transparent tax planning and harmonised regulatory reporting are therefore recommended.

Suggested Citation

  • Bamigboye Emmanuel Adeyinka & Awotomilusi Niyi Solomon & Adebola Abass Jabar, 2026. "Tax Aggressiveness and Market Performance of Listed Insurance Companies in Nigeria," Post-Print hal-05790649, HAL.
    • Handle: RePEc:hal:journl:hal-05790649
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