TAX AGGRESSIVENESS AND MARKET VALUE OF -MANUFACTURING FIRMS IN NIGERIA

Abstract: The study examined the effect of tax aggressiveness on market value of listedmanufacturing firms in Nigeria for the period 2005 to 2024 using secondary data derived fromfinancial statements of the firms examined. Study was carried out using purposive samplingmethod based on available data and establishing relationships amongst the variables based onmultiple regression analysis. The study also used Haussmann test to determine appropriatemodel and Granger causality test to determine direction of effect. The random effect estimationframework non-debt tax shield significantly and positively affects market price but the effect ofdebt tax shield is insignificant. Debt tax shield and non-debt tax shield exert significant effectson Tobin Q of manufacturing companies in Nigeria, although the effect of debt tax shield isnegative, while those of Non debt tax shield is positive. Based on findings, the studyrecommended that non cash flow strategies that do not encourage violation of debt covenantsshould be pursued to enhance market performance policy makers devise an optimal debt taxshield regime that enable the firms to avoid debt covenants defaults and prevent excessiveborrowing that can cause bankruptcy as the usefulness’s of debt tax shield in firm value is tiedto lesser and more manageable debt levels among manufacturing companies in Nigeria.