The Impact of Financing Structure on the Commercial Banks' Liquidity: An Analytical Study of a Sample of Banks Listed on the Iraq Stock Exchange

Abstract

This study seeks to analyze the impact of financing structure components on the liquidity of commercial banks in Iraq by using annual financial data for a sample of 15 commercial banks listed on the Iraq Stock Exchange during the period 2010-2022. To achieve the study objective, financing structure indicators for indebtedness were selected, represented by the ratio of total debt to owned capital and the ratio of total debt to assets. The indicators for equity were represented by the ratio of owned capital to total assets and the ratio of owned capital to total deposits, and the impact of these indicators combined on the current liquidity index as a representor for bank liquidity. The results were estimated according to Panel Data with its three models: Pooled, Fixed, and Random. The study concluded, according to the results of the FEM model (the model with the highest coefficient of determination), that the financing structure in the commercial banks in the study sample and during the period under investigation depends on the variable of the ratio of owned capital to total assets being the most influential variable in the variable of bank liquidity compared to the rest of the sources of the financing structure.