Corruption, Terrorism and the Stock Market: The Evidence from Iraq

ASAAD, Z. A., & MARANE, B. M. (2020). Corruption, Terrorism and the Stock Market: The Evidence from Iraq. The Journal of Asian Finance, Economics and Business (JAFEB), 7(10), 629-639.

12 Pages Posted: 3 Dec 2020

See all articles by Zeravan Asaad

Zeravan Asaad

University of Duhok; Cihan University - Duhok; Cihan University - Duhok

Bayar Marane

Cihan University; University of Duhok

Date Written: October 10, 2020

Abstract

The current study explains how corruption, terrorism, political stability and oil price has an effect on on the Iraq stock exchange utilizing corruption perception index as a proxy of corruption, global terrorism index as proxy for terrorism, political stability and oil price with ISX60 index as proxy of stock market for the period (2005-2019) using Ordinary Least Square method. The results show that the level of corruption, terrorism activities and political stability coefficient is significantly positive with Iraq stock exchange. In contrast, the oil price coefficient is significantly negative with Iraq stock exchange, which means that lower levels of corruption, less terrorism activities and more stability in political system have strong influence on stock market development in Iraq. The study concludes that the explanatory variables are important for Iraq stock exchange. Hence, the study suggests the policy makers to develop stock market by implementing policies and strategies to overcome high level of corruption, terrorism activities especially after ISIS/ISIL announcement has been made public. There is a need for transparency and creating stable political environment through good governance practices in order to attract more foreign investment and promote economic development. Factors like terrorism and corruption make economic and political systems unstable and has an adverse effect on on Iraq’s stock exchange performance.

Keywords: Iraq Stock Exchange, Corruption, Terrorism, Political Stability, Oil Price

JEL Classification: D53, D73, P48, G12

Suggested Citation

Asaad, Zeravan and Marane, Bayar, Corruption, Terrorism and the Stock Market: The Evidence from Iraq (October 10, 2020). ASAAD, Z. A., & MARANE, B. M. (2020). Corruption, Terrorism and the Stock Market: The Evidence from Iraq. The Journal of Asian Finance, Economics and Business (JAFEB), 7(10), 629-639., Available at SSRN: https://ssrn.com/abstract=3708991

Zeravan Asaad (Contact Author)

University of Duhok ( email )

Zakho Street 38, 1006 AJ Duhok
Duhok, Kurdistan Region 42001
Iraq
009647504570282 (Phone)

HOME PAGE: http://web.uod.ac/

Cihan University - Duhok ( email )

Hawshky - Behind Tenahi Complex, Duhok City – Kurd
Duhok, Kurdistan Region 42000
Iraq
009647504570282 (Phone)

HOME PAGE: http://duhokcihan.edu.krd/

Cihan University - Duhok ( email )

Hawshky - Behind Tenahi Complex, Duhok City – Kurd
Duhok, Kurdistan Region 42001
Iraq
009647504570282 (Phone)

HOME PAGE: http://www.duhokcihan.edu.krd

Bayar Marane

Cihan University ( email )

Street 100M
Duhok, Kurdistan Region 0383-23
Iraq

University of Duhok ( email )

Zakho Street 38, 1006 AJ Duhok
Duhok, Kurdistan Region 42000
Iraq

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