Impacts of earning management on stock price crash risks on the Vietnames Stock Market

Recent global turnoils has been significantly affected the Vietnamese stock markets due to its lack of efficiency, which can potentially lead to increasing stock price crash risks. This study examines the impacts of earning management on stock price crash risk for 202 listed companies on the Vietnames Stock Market from 2013 to 2022. Our empirical analysis reveals a positive association between earnings management and the subsequent year’s stock price crash risk. Further analysis suggests this effect is statistically significant only for upward earnings management, leading to reported earnings exceeding actual profitability. These findings highlight the low efficiency of the Vietnamese stock market, characterized by limited information transparency and a high proportion of individual investors, who tend to overreact to earnings information. Based on these results, the study offers policy recommendations for the Vietnamese stock market.