The impact of foreign direct Investment in Banking sector

A Thesis Submitted To

The Council of the College of Administration and Economics University of Karbala

As Partial Fulfillment of the Requirement for the Master Degree In Financial and Banking Sciences

By

Zainab Sadoon AL – Rubaai

Supervised By

PROF. DR. Hakim MUHSSIN MOHAMMAD Al – Rubaai

Abstract Study sought to analyze the relationship impact of foreign direct investment and banking sector, and that the importance of these two variables in terms of being the sources are essential in investment and generate funds and financing of various projects and job creation as study included analysis of foreign direct investment coming into Iraq through merger and the acquisition of measured percentage of GDP and contained data in the reports of international investment and its Annexes, the study covered the period between (2005 – 2011) for foreign direct investment , either for the banking sector propagated the study of the financial performance during the same period of (10) Bank Commercial Iraqi civil runway in the Iraqi market for securities, as well as briefing aspects of the theoretical concepts of the first – foreign direct investment types and factors affecting it and the most important policies through which the polarization and the environment state polarized him and the second – the banking sector in all aspects of the theory and purpose of this study was to identify the sources of foreign investment and nature of the relationship between these two variables and what is caused by entry of the foreign investor on morphological sector as has been analyzing the relationship between banks with local ownership and joint ownership of banks and financial analysis showed that the latter are better financial performance and in order to analyze the effect relationship has been the use of statistical analysis use the model Regression analysis simple to measure the impact of the independent variable (FDI) on the variables approved of (b performance indicators banking for banks sample a Credit Bank, Baghdad, trade, economy and Dar es Salaam). since focused problem around (Is that FDI entry no effects on the banking sector)? The study found a total of conclusions including: A – With regard to foreign direct investment. • the adoption of several laws and the establishment of bodies and the signing of several agreements that lead to the organization and encourage investment. • practical analysis showed that the volume of inflows to Iraq were very few and with large fluctuations. • With regard to the location of Iraq for international investment indicators was the site of Iraq is not good and needs a lot of reforms -With regard to the banking sector. b • Practical analysis showed the Iraqi banking sector that there are many developments that took place, including the issuance of laws that regulate this sector and the most important of the Banking Act No. 94 of 2006. • open the way for foreign investors as it attracted a variety of foreign investments in the form of units list numbered the end of 2011 (10) list of units and foreign investment in the form of participation in the capital of banks numbered list (7) . • As a practical side showed that banks that include foreign investments with better performance than other banks, and this is what indicated by the coefficient of variation. • results of the statistical analysis showed no significant relationship between foreign direct investment and financial performance indicators (study sample banks) so the hypothesis is rejected. The study concludes with a set of recommendations: • must provide the conditions for the provision of investment climate favorable investment environment to attract such investments and by granting more safeguards and advantages. • Provide the necessary information needed by the investor and promote them. • The need for Iraqi banks directed towards merge to form a large financial entities are able to attract such investments.