The Interactive Relationship between Investment Policies and the Quality of Corporate Profits

Abstract

Financial markets are a major and effective criterion in the field of economic integration of developed countries, as they are the most important tool for linking the economies of countries with each other and thus a mirror of the extent of success of those countries in the various fields of investment and development. As long as the main objective of modern financial management is to maximize the market value of the company by adopting different investment strategies and policies, attention to the type of investment policy is extremely important in determining the quality and quality of the profits of securities traded in the financial market. The (Johanson) models of cointegration were used to show the nature of integration and direction between the study variables, as well as the (Granger) model to clarify causality. The study concluded that investment policy is a major and decisive player in determining the quality of dividends in companies. Investment policy (X) and after the profitability of the banking sector (Y1), which means that there is a long-term equilibrium relationship between those variables.