The purpose of this study is to analyze whether asymmetric changes in effective tax rates are associated with future earnings and firm value. The results can be summarized as follows. First, changes in effective tax rates were found to be differentially associated with future earnings depending on whether pre-tax net income increases or decreases. When pre-tax net income increases, an increase in the effective tax rate is interpreted as a bad signal for future earnings, whereas when pre-tax net income decreases, an increase in the effective tax rate is interpreted as a good signal for future earnings. Second, changes in the effective tax rate were found to be interpreted differently by the stock market in the current period depending on whether pre-tax net income increases or decreases. When pre-tax net income increases, a positive change in the effective tax rate was interpreted as a positive signal in the stock market; however, when pre-tax net income decreases, the stock market exhibited a negative reaction to firms with increasing effective tax rates. Third, the stock market in the subsequent period exhibited the same reaction to changes in the effective tax rate as in the prior period. This suggests that the stock market's reaction to current-period changes in the effective tax rate persists into subsequent periods. The contribution of this study lies in verifying the usefulness of the corporate tax adjustment hypothesis by analyzing whether asymmetric changes in the effective tax rate are associated with firms' future earnings and firm value.