Impact of Financial Markets on Attracting Foreign Investment: An Analytical Study of the Iraq Stock Exchange (2010–2024)

Purpose: This study examines whether financial market development contributed to attracting foreign direct investment (FDI) in Iraq during 2010–2024. Design/Methodology/Approach: Annual data from UNCTAD, the World Bank, the Central Bank of Iraq, and the Iraqi Securities Commission were analyzed using descriptive statistics, Pearson correlation, and parsimonious ordinary least squares models. Findings: The Iraq Stock Exchange expanded noticeably, especially after 2021, but this progress did not coincide with a stable improvement in aggregate FDI inflows. The relationship between stock market indicators and FDI remained weak to mixed; specifically, FDI was weakly negatively correlated with market capitalization (r = -0.253) and more clearly negatively correlated with the ISX60 index (r = -0.542). Implications/Originality/Value: The study shows that financial market reform is necessary for investment readiness in Iraq, but its effect on foreign investment depends on broader institutional, political, and macroeconomic conditions.