The role of the Moderation Variable (REM) in influencing the relationship between foreign ownership and the risk of stock price collapse

Abstract

The research aims to explain the role of the structure of foreign ownership, and how to manage profits, and its aim is to avoid the risks of the collapse of stock prices—the theoretical side of the research.

As for the practical side, the data available in the financial statements of a sample of Iraqi banks listed in the Iraq Stock Exchange were relied upon, as the number of banks in the research sample was (6) banks for the period (2015-2020). The research dealt with foreign ownership as well as the “change in sales, and the change in production, and the change in optional expenses "as indicators for measuring profit management with real activities, while the method of fluctuations in monthly returns from top to bottom" was adopted as a model for measuring the risks of stock prices collapse, and the program (SPSS 10) was used to analyze and find out the simple linear correlation The t-test, the significance of the linear correlation coefficient, the simple linear regression, the variance, and the f test, as well as (Eviews 10) program in the analysis of the moderation variable.

After testing the hypotheses of the research, a number of conclusions were reached, the most important of which is that there is a statistically significant effect of managing profits in real activities as a moderating variable in the relationship between foreign ownership and the risks of stock price collapse. Management can help reduce or avoid the risk of a future collapse of stock prices by improving the financial reporting environment and activating control mechanisms and corporate governance, especially since the research has proven that there are practices for managing profits with real activities by some Iraqi banks listed in the Iraq Stock Exchange.