THE IMPACT OF INTERNAL FINANCING SOURCES ON MARKET VALUE: AN APPLIED STUDY ON A NUMBER OF COMMERCIAL BANKS LISTED ON THE IRAQ STOCK EXCHANGE

Abstract

The aim of this research is to study and analyze the impact of internal financing sources on market value, measured by the market-to-book ratio, of a number of Iraqi commercial banks. The research problem arises from the main question: "To what extent can reliance on internal financing sources improve the market value of commercial banks and reduce financial risks?" The study hypothesizes a significant correlation between internal financing sources and market value. The sample consists of ten Iraqi banks listed on the Iraq Stock Exchange over a period of seven years (2016-2022). The research concluded that there is a significant negative (inverse) correlation between market value and the category (A. Reserves), while there is a significant positive (direct) correlation with the category (B. Retained Earnings). The study recommends avoiding freezing internal funds or investing them in unimportant projects to achieve a positive impact on company performance and increase its market value.