Volume 08 Issue 03 March 2025
Hind Dheyaa Abdulrasool
College of Administration and Economics, University of AL Qadisiyah, Al Diwaniyah, Iraq
DOI : https://doi.org/10.47191/ijsshr/v8-i3-14Google Scholar Download Pdf
ABSTRACT
Despite reforms outlined in Iraq’s Investment Law No. 13 of 2006 and efforts to diversify its economy, the country’s private sector remains stifled by structural barriers. For firms listed on the Iraq Stock Exchange (ISX), these challenges are compounded by limited access to tax incentives, erratic government funding, and negligible R&D infrastructure, raising critical questions about their capacity to innovate and achieve sustainable financial performance. The purpose of this study is to examine the influence of tax incentives, government funding, and R&D investment in enhancing innovation effectiveness and subsequent financial performance. The present study limits its scope to the context of firms listed on the Iraq Stock Exchange (ISX). Data was collected through the annual reports of listed firms' annual reports in ISX. This study used multivariate regression analysis to examine hypotheses that have been proposed using SPSS. The study found that tax incentives, government funding, and R&D investment have a significant positive relationship with financial performance. The study also found that innovation effectiveness has a significant relationship with financial performance. Moreover, innovation effectiveness was found to mediate significantly the relationships between tax incentives, government funding, R&D investment, and the financial performance of Iraqi firms. The study is useful as it gave further insights for Iraqi firm, especially relating to identifying the impact of tax incentives, government funding, and R&D investment on firms’ innovativeness and financial performance, which is much needed in the literature.
KEYWORDS:Tax incentives, government funding, R&D investment, innovation effectiveness, financial performance.
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