Iraq Stock Exchange Research Articles

Impact of Brand Capital on the Stock Price Crash Risk, an Empirical Study

The factors influencing the financial market are rapidly becoming more complex. The impact of non-financial factors on the performance of a company’s common stock can increase in ways that were not previously expected. This study investigated how brand capital affects the risk of stock prices in Iraqi private banks listed on the Iraq Stock Exchange failing by identifying the likelihood of a crash caused by a negative deviation in the distribution of returns on ordinary shares. As a result, the current study’s concept is to review an analytical knowledge framework of the nature of that relationship, its changes, and its impact on the pricing of ordinary shares of the banks of the researched sector for the years 2009 to 2017, as well as by the 21 banks listed during that time and by the 588 observations using the expanded market model to determine quarterly changes in stock prices. In addition to testing the negative coefficient of skewness and the down-to-up volatility models to test the contribution of brand capital in reducing the risk of stock collapse, The test results showed that brand capital is closely related to the significant and adverse risks of a stock crash. Additionally, the first’s impact is inverse, as its content highlights the role that the research sample banks’ brand capital played in lowering the dangers of stock price crashes.

Investigating and analyzing the impact of IC on the profitability of companies listed on the Iraqi stock exchange

Investigating and analyzing the impact of IC on the profitability of companies listed on the Iraqi stock exchange

Corporate Governance and Its Relationship with Financial Performance in Iraq

It is expected that banks should operate with a recognized standard of corporate governance. The importance of excellent governance processes in banks cannot be overstated because they are essential to gain and maintain the confidence and the customers satisfaction. This paper aims to explore the relationship between corporate governance (CG) and financial performance (FP) of Iraqi listed banks. To obtain this goal, two econometric models were enhanced to measure the association between the variables by applying multiple linear regression. The secondary data was obtained from the audited annual financial statement of ten listed banks in the Iraqi stock exchange in the period 2017-2021. Four corporate governance proxies, such as (CEO Duality, board size, audit committee meetings and independent board) are tested on two indicators of financial performance (return on assets and return on equity). The finding illustrated that CEO Duality, board size, and audit committee meetings have a positive and significant influence on the financial performance of banks. On the other hand, a negative and significant association can be observed between the independent boards and banks’ financial performance. Hence, the study pointed out that the financial performance of banking industry has been impacted by all of the components of corporate governance selected in this research.

Measuring the Administrative Ability of Banks and their impact on Lending Behavior: Analytical research for a sample of banks listed on the Iraqi Stock Exchange

يهدف البحث الى قياس وتحديد علاقة الأثر بين القدرة الإدارية للمصارف عينة البحث (المتغير المستقل) وسلوك الإقراض (المتغير التابع)، فتم الإعتماد على التقارير السنوية لعينة من المصارف العراقية المدرجة في سوق العراق للأوراق المالية البالغة (8 مصارف) (مصرف بغداد، الإستثمار العراقي، الشرق الأوسط، الأهلي العراقي،الخليج التجاري، الموصل للتنمية والإستثمار، الشمال للتمويل والإستثمار، المنصور للإستثمار) من إجمالي المصارف المدرجة والبالغ (25 مصرفًا) للمدة (2006-2020) للإجاية على أبرز التساؤلات الواردة في مشكلة البحث (هل تؤثر القدرة الإدارية للمصارف عينة البحث في توجيه سلوك الإقراض؟). وتم قياس وتحليل متغيرات البحث بإستخدام عددٍ من الأساليب المالية (إسلوب تحليل مغلف البيانات (Data Envelope Analysis)(DEA)، إسلوب تحليل هيرشمان_ هيرفندال HHI) ) (Herfndahl-Hirschman)). وتم إختبار فرضيات الدراسة بإستخدام برنامج (Excel2010). وقد توصل البحث الى مجموعة من الإستنتاجات أهمها (إن هناك تأثير للقدرة الإدارية للمصارف عينة البحث في سلوك الإقراض)، هذا وإختتم البحث بعددٍ من التوصيات أهمها (ضرورة إهتمام المصارف عينة البحث برفع مستويات القدرة الإدارية الخاصة بها لما لها من آثارٍ إيجابية على توجيه سلوك الإقراض).

The extent of the impact of cash flow on financial performance: An applied study on a sample of commercial banks listed on the Iraq Stock Exchange for the period (2012-2021)

The purpose of the research project is to determine how much cash flows affected private banks' financial performance from 2012 to 2021. The research sample consisted of private commercial banks whose shares were listed on the Iraqi market between 2012 and 2021. These banks consisted of: Middle East Investment Bank, the National Bank of Iraq, and North Bank for Finance and Investment. The results of the research revealed that cash flows have a greater influence on the financial achievement of private commercial banks registered on the Iraqi market than returns on equity. Giving attention to the cash flow statement for its role used by decision makers and for the parties that use it.

Effect of Financial Independence on Reducing Risk of Financial Fragility

Purpose:This research aims to know and measure the impact of financial independence on financial fragility and to provide an applied knowledge framework that shows the relationship between these variables. Theoretical framework: and the research problem was represented in several questions, such as can financial independence reduce the financial fragility of the research sample companies?; and what is the level of financial independence and financial fragility of these companies?. Design/methodology/approach: Financial and statistical methods were relied on using the (SPSS) and (Excel) software. To answer these questions, test hypotheses and analyze the relationship between independent and dependent variables , several conclusions were reached, the most important of which is financial independence when companies reduce their dependence on debt and increase their dependence on internal resources as a main source of financing. Based on the conclusions, a set of recommendations was reached. The most important of which is the attention to restructuring the sources of financing for companies with high financial fragility, which contributes to increasing financial stability and reducing financial risks to a minimum. Findings: The research was based on a sample consisting of (6) industrial companies listed in the Iraqi Stock Exchange for the period from (2011-2020). Research, Practical & Social implications: The importance of the research lies in the fact that it has exploited the concepts of financial independence as it leads to reducing risks and assisting companies in reducing financial risks and reaching the required levels of performance, growth and continuity in a highly complex, unstable and limited environment, as well as contributing to urging companies to reconsider financial resources, and ways to benefit from it, which contributes to reducing costs and risks and increasing profitability. Originality/value: The importance of the current research is highlighted by delving into very important topics for industrial companies, as the concepts of financial fragility and financial independence are of increasing importance in the current era, especially in light of the competitive environment, high costs and difficulty in obtaining financial resources.

The Role of Income Smoothing on Financial Performance Indicators

The primary objective of this study is to determine whether income smoothing procedures have an impact on the financial performance of return on assets (ROA) and return on equity (ROE). Data for this study came from a sample of banks that are listed on the Iraq Stock Exchange. The research sample consists of banks listed between 2015 and 2019 on the Iraq Stock Exchange. The model estimate is done using the panel data approach. Five banks match the required requirements, and the samples were chosen using a purposive sampling technique. This study employs Miller's model to distinguish between banks that used income smoothing and banks that did not, as well as certain statistical techniques to examine the data. Two indices of financial performance—return on assets (ROA) and return on equity (ROE). Were used to compare the performance of smooth and non-smooth income banks and the variations in the influencing variables that influence each. The findings of this study demonstrate that return on assets (ROA) and return on equity (ROE) have a considerable impact on income smoothing procedures, while variable volume has a significant positive impact as well. In this study, we observed statistically significant differences between banks with and without smooth income in terms of their returns on assets (ROA) and returns on equity (ROE). We found a statistically significant positive relationship between bank size, financial success, and income smoothing in our study.

The Impact of Adopting International Financial Reporting Standards on the Quality of Financial Reports Using the Accrual Model

Objective: The research aims to define international financial reporting standards, in addition to showing their importance during historical development, for the purpose of adopting international financial reporting standards. Theoretical framework: It is clarifying the international financial reporting standards. In addition to showing its importance during the historical development, for the purpose of adopting international financial reporting standards. As well as the theoretical framework for the quality of financial reports. The adoption of international financial reporting standards was also affected, then the impact of international financial reporting standards on the quality of financial reports was measured. Method: The search relied on the deductive and inductive approaches, as the deductive approach was employed by studying the literature related to the subject of the research. As for the scientific aspect, the inductive, descriptive, and analytical approaches were adopted, as well as the statistical approach. Results and Conclusion: Results of the practical application of the research showed that the adoption of international financial reporting standards instead of the unified accounting system for banks has affected the quality of the financial reports of some banks listed in the Iraq Stock Exchange. It is concluded from this that there is a lack of proper application of international financial reporting standards because of the unclear understanding of them and how to apply them. Iraqi commercial banks need to adhere to the effective and proper application of international financial reporting standards to avoid many issues and fundamental errors related to the presentation of financial reports. Implications of the research: The adoption of International Financial Reporting Standards (IFRS) increases the possibility of comparing financial information, in addition to increasing the level of transparency and the quality of disclosure in financial reports. This means the application of standards reduces information asymmetry, therefore is reflected in the users of that information in decision-making. Originality/value: The value of research comes from the importance of international financial reporting standards and their ability to provide quality and comparable financial reports between different companies and economic units, also the role of it for improving the quality of financial reports.

تأثير سياسة توزيع الأرباح على قيمة الوحدة الاقتصادية

This research aims to test the theories explaining the profit distribution policy, by applying it to 4 sectors listed in the Iraq Stock Exchange, which are (industry sector, hotel and tourism sector, agricultural sector, banking sector), during the period (2013-2016), dealing with This research tested the policy of dividend distribution on the market value of the economic units, and the results of the research are consistent with the return preference theory, which was that the market value of the economic unit is affected by the dividend distributions. of shareholders at the same time, because in the event that this is achieved, the tendency of investors to invest in the economic unit is great, and this will provide a good source of financing for the unit.

Integration of IFRS and FN-IB Applications, as Well as Their Influence on the Value of Iraqi Banks

This study aims to measure the impact on the value of banks in light of the integration of the application between the international financial reporting standards IFRS and the Financial Standard for Sustainability Accounting FN-IB, as well as the performance indicators of the banks in the research sample, using the impact and correlation model. Accordingly, the study was conducted on 12 Iraqi investment banks listed on the Iraq Stock Exchange (2015–2021), i.e., 84 notes (bank/year). The research variables were measured based on the models developed by the previous literature, where the effect of applying the International Financial Reporting Standards (IFRS) was measured by financial performance indicators (return on assets, return on equity, financial leverage, company size (total assets), and earnings per share "before the application year 2015 to 2021"). Hence, the FN-IB variable was measured as the percentage of disclosure of sustainability accounting information for investment banks according to the standards of investment banks FN-IB (18). The dependent variable, the company's value, was measured using the measurement model (Tobin's Q) for the study sample companies, in addition to measuring the effect of integration between the criteria for the two groups using multiple regression. In addition to the statistical methods to test the research hypotheses and find out the size of the correlation and the coefficient of determination using the statistical package for social sciences (SPSS) and the spreadsheet programme (Excel), The study results showed a correlation and effect between the integration of international financial reporting standards and FN-IB and company value. This relationship varies between positive, negative, strong, and medium. The inconsistency may be due to company size, management, and the cultural awareness of investors, customers, and regulators.

Evidence from Iraqi Banks on the Reporting of Sustainability Determinants and Their Impact on Market Returns

The objective of this study is to define the concept of sustainability, its dimensions, and the importance of reporting it; to measure the level of reporting on the dimensions of sustainability for banks listed on the Iraq Stock Exchange; and to determine the effect of the level of reporting on market returns and the cost of equity financing. A sample of commercial banks registered on the Iraqi market was chosen for the study objective. The study relied on the applied side of the employment of environmental, social, and governance (ESG) indicators and the standards of the Global Reporting Initiative (GRI) to analyze the content of the reports of the commercial banks and to determine the extent of their commitment to reporting on the dimensions of sustainability. Commercial banks issued ten (10) securities during the period (2016–2021). The market returns of shares were calculated using the annual closing and opening share prices. Between weak and very weak, the general average level of reporting information related to the economic pillar was 34.22. In comparison, it was 7.23 for the environmental and 15.70 for the social pillars. The governance axis had a reporting rate of 24.95%, while the average reporting rate for other public disclosures was 43.72%. The study also uncovered a direct and statistically significant relationship between the market returns of the study sample institutions' shares and the dimensions of sustainability.

The Possibility of Adopting Program and Performance Budget to Evaluate the Performance of Banks

This study examines program and performance budget and its role in evaluating bank performance. Program and performance budget represents a system for preparing a budget for all expenses allocated each year. The budgeting process begins for each job within the bank and is analyzed according to its needs and costs. Subsequently, a budget is prepared based on the requirements of the upcoming period, regardless of any increase or decrease compared to the previous one. Program and performance budget contributes to cost reduction by avoiding the fluctuations that occur in the budget of the previous period. However, it requires more time than traditional budgeting, which does not hinder its implementation. The study applied program and performance budget to a private bank listed in the Iraq Stock Exchange. The aim was to develop the banks budget by using program and performance budget as a tool for planning, control, and performance evaluation. The necessary applications were carried out to implement it, including identifying key programs and related activities, allocating expenses based on the categorization of those activities and programs, and excluding expenses unrelated to performance, which reflects efficiency in performance. The following were the main conclusions: 1. The possibility of implementing program and performance budget in banks to achieve effective accountability and control. 2. Defining actual achievement standards, measuring efficiency, and making decisions for future years. The study arrived at a set of recommendations, including: 1. The necessity of preparing financial and accounting data with minimal time, effort, and cost, and providing competent human, administrative, and accounting resources to implement program and performance budget without problems and difficulties. 2. Encouraging management to make strategic decisions based on the data of program and performance budget, as it helps in continuous evaluation and review of those decisions in order to face financial and economic crises and address unstable conditions.

The Impact of Ownership Structure on Bank Profitability and the Diversity of Products: new Evidence from Iraqi Banks

Purpose: The objective of this study was to identify the impact of the ownership structure on the profitability and the diversity of banking products in commercial banks listed on the Iraq Stock Exchange. Theoretical framework: Investigating the factors affecting bank performance is an important debate these days. The literature refers to the importance of the ownership structure in deriving various types of performance in companies. However, there is still much to investigate and learn about the sensitivity of the performance of banks to various types of ownership structures. Design/methodology/approach: Using a linear regression model, we analyzed the relationships between ownership structures and the company’s profitability, as well as product diversity for the period span from 2011 to 2020. We focused our investigation on commercial banks listed on the Iraq Stock Exchange. Findings: The empirical findings show that the ownership structure has a mixed effect on Iraqi bank profitability measured by return on assets, return on equity, and Q-Tobin ratio. Nevertheless, the result confirm the significant influence of the ownership structure on the diversity of banking products. Research, Practical & Social implications: The results indicate that Iraqi banks’ regulators and supervisors should give more attention to the sensitivity of banks’ performance and diversity of the products to the effect of ownership structure. Originality/value: This study is among the first to investigate the relationships between ownership structure measured by the concentration of ownership, institutional ownership, and administrative ownership on the Iraqi commercial banks’ performance, whether financial or non-financial such as the bank's profitability and diversification of its products.

The Impact of the Application of Information technology governance on financial performance through the mediating role of Banking governance A survey of sample of Iraq banks listed in the Iraq stock exchange

The current study aimed to measure the long-run impact of IT governance in the COBIT framework on the financial performance of Iraqi banks within the framework of banking governance as a mediating variable. by running balanced panel data for a sample of 19 listed Iraqi banks during the period (2018-2020) using the path analysis method. The study concluded that there is a direct positive impact of IT governance on financial performance, as opposed to an indirect, negative impact of IT governance on performance through banking governance. Thus, banking governance plays a mediating role "partial mediation" in the relationship of IT governance with the financial performance of Iraqi banks. Also, this direct effect has a medium practical importance, in contrast to a large practical importance for the indirect effect, while there was no effect size (practical importance) for the total effect. This is because the negative impact of banking governance cancels any direct impact of IT governance on financial performance. Hence, any overall impact of IT governance on financial performance vanishes, and any practical importance of this relationship in the Iraqi accounting and administrative environment vanishes with it. Thus, Iraqi banks must rely on one element of governance only, whether banking governance or information technology governance. Finally, the study also concluded that there is no inverse circular causal relationship between financial performance and the level of banking governance.

The modified role of the company's characteristics in the relationship of accounting disclosure transparency with the restatement of financial statements: Evidence from Iraq

The research aims to demonstrate the transparency relationship of accounting disclosure with the restatement of financial statements in the light of the role of the company's characteristics within the Iraqi industrial and banking sector. The sample research included financial reports of certain companies and banks listed on the Iraq Stock Exchange that summarized the sample with 16 companies, selected from two different sectors, namely; The banking sector (eight banks), the industrial sector (eight companies), from (2011) to (2021) with (176) views. The transparency of accounting disclosure has been measured through the Standard and Poor s' model. This measure is considered one of the most important and best measures of transparency used ever. But the reissue of the financial statements was measured by a dummy variable (1,0), the latter being the company's characteristics measured by six characteristics (company size, company profitability, leverage, company age, industry type, ownership structure). Research concluded that there is a (positive) correlation between the transparency of accounting disclosure and the restatement of financial statements under the company's respective characteristics (Company Size, Company age, Industry type). That is, as these characteristics increase, they will strengthen the relationship between variables, as well as a negative correlation between the transparency of accounting disclosure and the restatement of financial statements under the Company's characteristics represented by (Ownership structure). When excluding this property the relationship will be more positive. As for the company's characteristics (profitability, leverage) has not recorded a significant impact on research variables.

The Effect of Investment Risks on the Efficiency of Stock Pricing - Analytical Research

The research aims to know the effect of investment risks measured by the beta coefficient on the efficiency of stock pricing measured by the pricing error. The research was applied in the banks listed in the Iraq market for the period (2017-2020). That affects the value of the shares of the companies listed in it and the risks associated with it, as the risks are a dynamic process that changes over time depending on the variables that affect the general development of the economy, so these fluctuations should be taken into account to achieve maximizing returns and reducing risks and what is reflected in stock prices in the Iraqi markets Securities, through which the following question was asked: How does investment risk affect the efficiency of stock pricing in the Iraq Stock Exchange? In light of this, the importance of the research and its objectives were determined, and the research methodology relies on the analytical method as it is more appropriate to the nature and scope of the research, in order to reach the results that the research aims at.

The Modified Role of (IFRS15) Standard in the Relationship of Earnings Quality with the Complexity of Financial Reports: An Empirical Study on a Sample of Iraqi Banks

The research aims to demonstrate the modified role of the (IFRS15) standard in the relationship of profit quality with the complexity of financial reports within the Iraqi banking sector. The sample research included the financial reports of some of the banks listed in the Iraqi stock exchange for (15) Bank from (2011) to (2021) with (165) view. Both researchers used these measures to evaluate the earnings quality: the quality of Accruals and the accounting conservatism according to the market value of equity to book value. The complexity of financial reports was measured by the volume of disclosure, while the International Financial Reporting Standard (IFRS) was measured by relying on (10) indicators as evidence of the application of the five steps of this standard. Research has concluded a significant negative correlation between the earnings quality and the complexity of financial reporting and that this relationship becomes more negative with the adoption of IFRS15.

Accuracy of Capital Asset Pricing Model and Arbitrage Pricing Theory in Predicting Stock Return

The process of predicting the stock return is considered the main challenge confronting the financial analyst and the investment decision-maker in particular. The objective of the study aims at testing the ability of both CAPM model and APT theory in predicting the stock return. The study investigated a sample of 10 banks listed in the Iraq Stock Exchange for the period (2012-2021). A variety of appropriate statistical and financial means and tools were employed. The study results in many conclusions including the rejection of the study hypotheses and the acceptance of alternative hypotheses based on the analytical results, and then there is a difference in the required rate of return calculated according to each of CAPM model and APT theory as well as the actual return.

A Financial Behavior Measurement Model to Evaluate the Financial Markets

Purpose: This study examines the relationship between the financial behavior measurement models and evaluate the financial markets all sectors listed on Iraq Stock Exchange. The current study also to develop a quantitative model for measuring the financial behavior of investors in the financial markets, and thus knowing their behavior, therefore, determining the efficiency of the investment sectors that are being traded. Theoretical framework: Quantitatively measuring the financial behavior of investors is one of the important issues that have occupied specialists in the financial field due to its close relationship with the level of market efficiency, as well its global indexes. Financial behavior among the behavioral concepts related to the general situation of the investor whether with the knowledge, he possesses or the social situation in which he is present. Design/methodology/approach: The study uses the Quantitative and mathematical analysis. The sample data of this study includes the period from 2004, the date of the establishment of the Iraq Financial Market, until 2020. Findings: The study reveals consistent results with the model. The results show that the proposed model can be applied in any of the financial markets to know investors' behavior and show efficiency for the sectors in the financial market, as well important findings of the study is the inefficiency of most sectors. In addition to that, some sectors in it with performance and efficiency are almost the same during the study period. Research, Practical & Social implications: This study helps Investors and companies on determining the efficient sectors and therefore identifying profitable sectors and selecting them for trading. Originality/value: The findings suggest several Important results for the fields Financial behavior, and efficiency evaluation in financial markets, It has been developed a quantitative model for measuring the financial behavior of investors in the financial markets, and thus knowing their behavior. The model has proven successful in identifying profitable and losing sectors in the Iraq Stock Exchange

The Effect of it Governance on the Relationship Between Corporate Social Responsibility and Performance in Iraqi Banks

Purpose: The purpose of this research is to understand the greater responsibility placed by various organizations on the social responsibilities of the organizations towards their stakeholders. It also aims to explore the Corporate Social Responsibility (CSR) for daily operations of organizations to fulfill their social responsibilities to society. Theoretical Framework: The study made assumptions based on in-depth review to investigate variables in Iraqi context. One of the comprehensive measurement criteria provided by Liao (2019) covers the three dimensions of effectiveness, efficiency, and consistency. Design/methodology/approach: The statistical population contains all listed companies on the Iraqi Stock Exchange between 2015 and 2021. The hypotheses were tested employing a multivariate regression model. The hypotheses of the study were tested using a sample of 168 observations from listed Iraqi banks from 2015 to 2021 and a multiple regression model based on the panel data technique of the random effects model. Findings: The results showed a positive and statistically significant relationship between social responsibility and bank performance. Also, information technology governance (ITG) moderates this effect. Additional methods (t+1, fixed effects, ordinary least squares) were employed to test the validity of the research models. Research, Practical & Social Implication: As this is the first study to investigate this issue in emerging markets, it provides users, analysts, and legal bodies with valuable information regarding CSR, which substantially impacts banks' performance. Originality/value: The finding suggests several consequences of IT governances and its effects on corporate social responsibility which contributing to the development of knowledge.