THE IMPACT OF NARRATIVE DISCLOSURE ON MARKET VALUE: THE MEDIATING ROLE OF FINANCIAL PERFORMANCE

Abstract

Objective: This study examines the effect of narrative disclosures on market value and the mediating role of financial Performance in Iraq, based on a sample of listed banks in ISX from 2018 to 2024. In contrast to previous studies, which typically focus on a single side of narrative disclosures, this study explores multiple effects.

Design/methodology/approach: The research design is a quantitative approach. Using the content analysis method regarding narrative disclosure, which utilizes a structured checklist for data generation, on the other hand, using the financial ratio analysis method for Financial Performance and Market Value indicators. The study develops hypotheses using the agency, signaling and stakeholder theories.

Findings: Using regression analysis, the study examines the influence of narrative disclosures on market value and financial Performance. The results indicate that banks with more disclosure dimensions achieve higher market value. However, various models validate the explanatory power of narrative disclosures, highlighting their role in enhancing firm value by positively influencing overall financial performance.

Empirical implications: The findings provide insights into how narrative disclosures can help banks' stockholders overcome transparency and symmetry of information deficiencies in making more discretionary disclosure related to future earnings of shares and general bank performance.

Originality/value: This study analyses the influence of six aspects of narrative disclosure on market value and financial performance in Iraqi commercial banks.