Cover
Volume 7, Special Issue 3 (2026)

Published: July 31, 2026

Pages: 123-131

Research articles

The impact of digital transformation on predicting stock returns: The mediating role of profitability indicators evidence from industrial companies listed on the Iraq Stock Exchange

Zaid M. Alabassi 1 Haider Naser 1
1Al-Furat Al-Awsat Technical University, Najaf, Iraq
History
  • Received: May 24, 2026
  • Revised: June 25, 2026
  • Accepted: July 1, 2026
  • Available Online: July 25, 2026
DOI

https://doi.org/10.56967/ejfb2026874

Abstract

The digital transformation of industrial companies plays a prominent role in increasing their market share and thus increasing their ability to compete, survive, and grow. The current study aims to measure and analyze the impact of digital transformation on predicting stock returns through profitability indicators. The study population consisted of manufacturing firms traded on the Iraq Stock Exchange, from which representative sample was drawn. The study focused on a sample of (7) manufacturing firms traded on the Iraq Stock Exchange, and the selected time series was (12) years, i.e., from (2012) to (2023). A set of statistical methods was used, utilizing multivariate regression analysis and t-statistical evaluation. The (Eviews 10) and (smart-pls 4) software were used in the analysis and hypothesis testing. A set of conclusions was reached, the most important of which is that companies that adopt smart production systems and where Companies with a higher proportion were better to exploit investment opportunities, which positively affected stock return can exploit investment opportunities optimally, and thus increase their returns, which is reflected positively on the earnings per share and the stock dividend, which ultimately leads to an increase in their stock returns. Based on these findings, a set of recommendations was made, most importantly the need for industrial companies to adopt smart production systems and increase their spending on research and development. These measures enhance their ability to capitalize on investment opportunities and thus increase their returns.

Keywords

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