Journal of Economic, Finance Research and Review (JEFRR) · Research article · Open access

The Role of Derivative Financial Instruments in Stimulating Economic Welfare Indicators in Iraq Joint Research

Dr. Hamza Hassanain Abdulmonaam Al-Hakeem, Wasan Raad Sallom Al-Hakeem

31 December 2025 · Vol. 1, Issue 6, pp. 200-214

DOI: 10.65150/EP-jefrr/V1E6/2025-07

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Abstract

Financial derivatives are instruments used in financial markets. These instruments were designed for hedging and developed to increase production and investment and build confidence in producers. Four important instruments are used in financial markets: forward contracts, futures contracts, options, and swaps. This study aims to introduce and define these instruments, assess their theoretical and practical acceptance by economists, and examine their use in the Iraqi economy. It explores whether these instruments have contributed to Iraq's growth and development. The research problem is: Financial crises are a result of the use and expansion of derivative financial instruments in Iraqi growth and development. The study aims to: Derivative financial instruments are considered financial tools used for risk management and hedging for investors, and a source of liquidity for financing credit in the financial market to increase growth and development and achieve prosperity in Iraq. This scientific endeavor also aims to achieve several objectives, the most important of which are: defining the concept and importance of derivative financial instruments, their key characteristics and functions, and determining the ability of financial instruments in Iraq to attract investment. The study examines the savings and strategies employed by banks and their role in enhancing the wellbeing of the Iraqi economy. The research hypothesis states that applying standards for derivative financial instruments in regulating the Iraqi financial market facilitates credit financing, thereby contributing to economic growth and increased prosperity. The study's significance lies in demonstrating the role of derivative financial instruments in the nature of banking operations and their ability to stimulate the Iraqi economy towards prosperity. This distinguishes derivative instruments from other instruments, which are considered efficient means to achieve a better life and greater economic well-being. Consequently, normative discussions are only necessary in extreme cases to rectify the excesses of the capitalist banking system and other conventional banking systems. Increasing the effectiveness of derivative financial instruments within the banking system is capable of generating new sources of savings and financing the capital necessary for investment. This, in turn, addresses imbalances in production sectors and improves the structure of the national product, ultimately stimulating and enhancing the well-being of the Iraqi economy. The study concludes that countries have no option but integration to maintain an active presence on the international stage and confront other blocs. Through the practical aspects explored by the researcher, it was found that derivative financial instruments have a significant impact on achieving economic prosperity. In Iraq, a positive correlation was found between the indicators of derivative financial instruments and the indicators of economic well-being in it, and there is a statistically significant effect between financial instruments and stimulating economic well-being capacity through the questionnaire that the researcher worked on in the country of study and the opinions of workers in the Iraqi economy, including employees, department managers and workers, and entering that data into the statistical system (SPSS) and extracting the results in the form of numbers and discussing them statistically and economically

Keywords: Financial derivatives, economic welfare, banking system, Iraqi economy.

Dr. Hamza Hassanain Abdulmonaam Al-Hakeem, & Wasan Raad Sallom Al-Hakeem (2025). The Role of Derivative Financial Instruments in Stimulating Economic Welfare Indicators in Iraq Joint Research. Journal of Economic, Finance Research and Review, 1(6), 200-214. https://doi.org/10.65150/EP-jefrr/V1E6/2025-07

@article{Dr2025,
  title   = {The Role of Derivative Financial Instruments in Stimulating Economic Welfare Indicators in Iraq Joint Research},
  author  = {Dr. Hamza Hassanain Abdulmonaam Al-Hakeem and Wasan Raad Sallom Al-Hakeem},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2025},
  volume  = {1},
  number  = {6},
  pages   = {200-214},
  doi     = {10.65150/EP-jefrr/V1E6/2025-07},
  url     = {https://doi.org/10.65150/EP-jefrr/V1E6/2025-07}
}

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