The Impact of the Political Instability on Bank’s Performance: Evidence from Iraq
Hamid Mohsin Jadah,
Department of Finance and Banking, College of Administration and Economics, University of Kerbala, Iraq.
Noor Hashim Mohammed
Department of Finance and Banking, Imam AL-Kadhum College for Islamic Studies- Babylon Departments
Md. Mahadi Hasan
Department of Business Studies, Anwer Khan Modern University, Dhaka, Bangladesh
Adetayo Olaniyi Adeniran
Department of Transport Management Technology, Federal University of Technology,
This study aims to empirically investigate the impact of political instability on bank’s performance. A sample of selected listed banks at the Iraq Stock Exchange (ISX) was used to test the aforementioned relationship. This study utilized secondary data collected from an annual financial report for selected banks. Moreover, Political instability indicators were collected through World Development Indicators databases. The impact of political stability and bank’s performance is tested for the pre- Islamic State of Iraq and Syria ISIS period (2009-2013) and during ISIS period (2014-2017). The study used panel GLS to attain the proposed objectives. Diagnostic tests such as heteroskedasticity, normality, serial correlation and multicollinearity were performed before employing GLS. The results revealed that there is a significant negative association between political instability and bank performance during-ISIS period. This research contributes knowledge in the field of political instability and bank performance in Iraq.That said, this paper provides significant contributions to the theoretical literature, the industy, and policymakers so that the Iraqi conventional banks’ performance can be enhanced in the environment with chronic political instability.
Keywords: Bank Performance, Iraq, ISIS, Panel data method, Political Instability.