The Evaluation of the Impact of Competition on the Profitability of Commercial Banks in Iraq
DOI:
https://doi.org/10.31150/ajebm.v5i11.1594Keywords:
competition, profitability, banking sectorAbstract
The increase in the number of banks and the increase in the needs of customers and banking products and the entry of technology into the banking business have led to an increase in the intensity of competition in the banking sector in Iraq, and the impact of competition in the banking sector on the profitability of banks has not been studied. Banking and risk reduction are important in many aspects. This paper studies the impact of competition on profitability in the Iraqi banking sector using an OLS estimator through a data set of 21 commercial banks in the Iraqi Stock Exchange. The main results showed that the high competition index leads to the achievement of lower profits by Iraqi banks, because these banks tend to reduce the degree of risks they bear, which in turn brings profits, which is measured through the return on shares and net investment. In addition, our empirical results also show that banks tend to increase collateral to reduce risk when faced with increased competition.
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