The role of market capitalization on economic growth in Iraq: for the period of (2005-2022)

Abstract

This study investigates the relationship between market capitalization (LMCAP) and economic growth, measured by Gross Domestic Product (GDP), within the context of Iraq from 2005 to 2022. The analysis employs unit root tests, cointegration tests, and regression analysis to explore the dynamics between these variables. The findings reveal a statistically significant positive effect of market capitalization on economic growth, highlighting the crucial role of a vibrant financial market in driving economic expansion. The presence of a long-term relationship between market capitalization and GDP underscores the sustained impact of financial market development on economic growth in Iraq. These findings have important implications for policymakers in Iraq, emphasizing the significance of promoting a strong and dynamic financial market to stimulate economic growth. Further research exploring additional variables and causal mechanisms would enhance the understanding of the dynamics between market capitalization and economic growth within the Iraqi context.