The Impact of Digital Transformation on Enhancing Cash Liquidity in a Sample of Commercial Banks Listed on the Iraq Stock Exchange

Abstract

This research aims to measure the impact of digital transformation on enhancing cash liquidity for a sample of Iraqi commercial banks listed on the Iraq Stock Exchange, namely (Bank of Baghdad, the National Bank of Iraq, and Mansour Investment Bank), during the period (2020-2024). The study adopted three indicators of digital transformation as independent variables: Intangible Assets Intensity (INT), Technology Investment Size (TI), and Operational Technology Expenditure Intensity (OE), while Cash Liquidity (CL) represented the dependent variable. The research utilized quarterly data extracted from the financial reports of the banks in the sample, and employed both the descriptive-analytical approach and the econometric approach, using Panel Data models and the Generalized Method of Moments (GMM) to address econometric issues and achieve more accurate estimates. The results showed a significant impact of both Intangible Assets Intensity and Technology Investment Size on cash liquidity, indicating that increased investment in intangible assets and modern technologies contributes to enhancing banks' cash liquidity. In contrast, Operational Technology Expenditure Intensity did not show a significant effect during the study period. The findings confirm that digital transformation represents an important factor in improving cash liquidity management efficiency and enhancing the financial performance of Iraqi commercial banks.