The Potential Impacts of Some Economic and Financial Variables on Private Investment Using the Augmented ARDL Approach

Abstract

The study examined the effectiveness of some financial and economic variables in Iraq on private investment and whether the impact was positive or negative. Based on the assumptions of the study, which stated that government spending, gross domestic product (GDP), inflation, and unemployment significantly affect the performance of private investment in the Iraqi economy, causing to retreat in the level of private investment in Iraq. and for the purpose of solving the research problem, which is represented by to retreat in the role of private investment in Iraq due to its influence on financial and macroeconomic variables such as government spending. The GDP suffers from significant fluctuation as a result of weak economic diversification, as well as high rates of inflation and some variables. Also, how the independent variables (financial and economic) affect the dependent variable (private investment), augmented autoregressive distributed lag approach was relied upon, relying on annual data from 1990 to 2023. The study reached several conclusions, the most important of which are: It was found that there is a long-term cointegration relationship between the variables, as well as the existence of short-term equilibrium relationships, and that the decline and fluctuation in the independent variables had a negative impact on the dependent variable. As for the recommendations, the most important are that there should be a major role for the private sector and that laws and legislation give more space to the private sector in economic activity.

Received: 21 April 2025 | Revised: 26 September 2025 | Accepted: 27 October 2025

Conflicts of Interest

The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

Data available on request from the corresponding author upon reasonable request.

Author Contribution Statement

Fahad Huzayran: Conceptualization, Methodology, Investigation, Writing – original draft, Supervision, Project administration. Amer Ahaimed: Software, Formal analysis, Investigation. Hebat Allah Al-Sayyid Ali: Validation, Writing – review & editing, Visualization.