The Relationship between Financial Indicators and the Trading Volume of the Iraqi National Bank Listed on the Iraq Stock Exchange

Abstract

The relationship between the financial indicators of the Iraqi National Bank and the trading volume of its shares is of great importance in supporting investment decisions and stimulating economic growth. Accordingly, the research problem is represented by the extent of the relationship between the financial indicators of the Iraqi National Bank in the Iraq Stock Exchange and the trading volume of its shares. Based on this, the research aims to analyze the quantitative relationship between the financial indicators and the trading volume of shares for the Iraqi National Bank listed on the Iraq Stock Exchange for the period (2005-2022). A hypothesis was formulated that there is a relationship between the financial indicators of the Iraqi National Bank and the trading volume of its shares. To achieve the study's objective, economic analysis and modern econometric methods were employed, including testing the stability of time series, testing the stability of the model as a whole, determining optimal lag periods, testing for cointegration, estimating the Vector Autoregression (VAR) model, the Vector Error Correction Model (VECM), and causality testing (Toda-Yamamoto). The results of the causality test for the Iraqi National Bank indicate that the relationship between the return on equity ratio and the earnings per share ratio is not significant with trading volume, while the relationship between the liquidity ratio, the debt-to-equity ratio, and the turnover of fixed assets is significant with trading volume.