Unraveling the Nexus Between Earnings Quality, Tax Avoidance Behavior, and Firm Performance: Evidence from Vietnam

Thi Thanh Binh Vu (), Tuyet Trinh Ngo and The Binh Vu ()
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Thi Thanh Binh Vu: VNU University of Economics and Business
Tuyet Trinh Ngo: Hanoi University of Natural Resources and Environment
The Binh Vu: VNU University of Economics and Business

A chapter in Proceedings of the 6th International Conference on Research in Management & Technovation, 2026, pp 223-235 from Springer

Abstract: Abstract This study scrutinizes the significance of tax avoidance and earnings quality in shaping firm performance in Vietnam, a frontier emerging market. The study examines how tax avoidance and earnings quality influence firm performance, using return on assets (ROA) and return on equity (ROE) as performance indicator. The analysis is conducted on panel data covering the period from 2015 to 2022, with further comparisons made across the before and after COVID-19 periods. The study used panel data analysis to evaluate 3,360 observations of non-financial public firms in Vietnam. Empirical results reveal a negative effect of earnings quality on ROA and ROE. While tax avoidance shows a positive impact on ROE across all periods, its effect on ROA turns negative in the post-COVID period. This result indicates that the benefits of tax planning may be reduced under economic uncertainty. The study enriches existing literature by offering context-specific evidence drawn from a transitional economy, highlighting the importance of strengthening corporate governance and regulatory enforcement to ensure the effectiveness of financial reporting and tax strategies in value creation.

Keywords: Firm Performance; Earnings Quality; Tax Avoidance; Covid-19; Transition Economy (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-95-9113-8_19

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DOI: 10.1007/978-981-95-9113-8_19

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