The Efficiency of the Banking Sector and Its Impact on Trading VolumeAn Analytical Study of a Sample of Iraqi Banks Listed on the Iraq Stock Exchange

Abstract

 Banks are a double-edged sword that may play a prominent and vital role in mobilizing savings, financing economic activities, and driving economic growth and development. On the other hand, inefficient bank management may be a factor causing financial crises at the local or global levels. The research problem has crystallized around the efficiency of the banking sector and its impact on the trading volume index, and attempts to answer the following question: Does banking efficiency have an impact on the trading volume index of the banks in the study sample? And what is the extent of that impact? To achieve the research objective, panel data regression models were used due to their special importance in increasing the number of observations, which allows for reaching more reliable standard results. In addition, they gain great importance as they take into account the effect of time changes and the effect of the difference between cross-sectional units equally. The research reached a number of conclusions, the most important of which are: Market indicators are a function of supply and demand in securities markets. The most important characteristic of the supply and demand mechanism for traded stocks is that it is largely influenced by information received by investors regarding the expected future returns of joint-stock banks, as well as the economic, political, and security conditions that Iraq has witnessed since the establishment of the financial market. Panel data models showed that the random effects model (REM) is the appropriate model for estimating the impact of investment efficiency and loan efficiency on the trading volume of the Iraqi banks included in the study sample listed on the Iraq Stock Exchange for the period (2016-2023). However, the study hypotheses indicating the existence of a significant positive relationship between (investment efficiency and loan efficiency) on (trading volume) for banks listed on the Iraq Stock Exchange for the period (2016-2023) were not proven, according to statistical theory.