Effect of Stock Exchange Operations on Economic Growth in Nigeria (original) (raw)
Related papers
An Assessment of Nigerian Stock Exchange Market Development to Economic Growth
2015
This research investigates the effect of Nigerian stock exchange market development on economic growth using a 20 year time series data from 1990-2010. The method of analysis is ordinary least square techniques. The study measures the relationship between stock market development indices and economic growth. The stock market capitalization ratio was adopted as a proxy for market size while value traded ratio and turnover ratio were used as proxy for market liquidity. The study revealed that market capitalization and value traded ratio have a negative correlation with economic growth while turnover ratio has a strong positive correlation with economic growth. The policy makers and other institution relevant should put effort towards tuning market capitalization and value trade ratio into significant positive in the near future, so as to encourage economic growth in line with stock market development.
THE STOCK MARKET; AN IMPERATIVE FOR ECONOMIC GROWTH CASE STUDY OF NIGERIA STOCK EXCHANGE
This study examined the role of the stock market in Nigeria's economic growth. It aimed at finding out the relationship between stock market activities proxied by market capitalization (MCP), all share index (ASI) and value of new shares (VNS) on Nigeria's economic growth proxied by GDP. Data were collected from CBN Statistical Bulletin from 1985-2016. The regression analysis, ADF test, Cointegration Error correction model and granger causality were used to analysed the data. The regression analysis shows that ASI has positive but insignificant relationship with GDP. MCP has positive and significant relationship with GDP. VNS has negative and significant relationship with GDP. The ADF result shows that all the variables are stationary in order one. The co-integration result suggests that there were two cointegrating equations while the error correction model indicates a negative sign with F-cal having prob.value of 0.0006 hence there is long run relationship between capital market activities and Nigeria's GDP. The granger causality test shows that there is no granger causality relationship between GDP and ASI while VNS and MCP have unidirectional causality relationship with GDP. It concluded that the establishment of the stock market is one the best thing that has happened to the Nigerian economy. From the findings, it recommends the need for more reform to be carried out at the market to enhance its activities and financial intermediation functions. Furthermore, information on new shares should be promoted through the mass media to encourage buying by the public.
2020
This study examined the effect of the Nigerian Stock Exchange on Economic Growth in Nigeria: Perspectives for the period 1990-2015. To achieve this objective of the study, annual time series data of real gross domestic product (RGDP), Domestic participation (DOP), Listed domestic companies (LDC), the Turnover ratio of the stock market (TOR), and Value of shares traded to GDP ratio (VST) were collected and analyzed using techniques of Autoregressive Distributed Lag Model (ARDL) and ARDL bounds test)ADF unit root test was used to test the stationarity of time series variables. The order of integration of all variables was at the level and first difference. Therefore, the ARDL bounds test for cointegration was adopted and ARDL method of estimation was used to estimate short-run dynamics among variables. The results showed that there exists a long-run relationship among variables. LDC had a negative and significant effect on lnRGDP. In the second lag with a p-value of 0.0459. While VST had a positive and significant effect on lnRGDP with a p-value of 0.0334 TOR had a Negative and significant effect on lnRGDP with a p-value of 0.0296; The positive coefficient exhibited by VST as a function of lnRGDP symbolizes that the effective participation of Nigerian investors in the Nigerian stock exchange is capable of having positive effect on the nation's economic growth and development. The paper recommends that proper investors' education should be adequate to forester increased domestic participation.
The Nigerian Stock Exchange and Economic Growth (1980 – 2011) an Econometric Approach
The study empirically examine the impact of the Nigerian Stock Exchange on economic growth from 1980-2011. The period was considered appropriate for the study in view of the challenges of building a strong financial base for the economy for long term investment that stimulate economic growth and development of Nigeria. Over the years, Nigeria capital market has developed in a more reliable market in terms of accessibility of funds. Also, the capital market form the basis in which assets and other near money such as shares and bonds can be easily converted into cash. For the purpose of this work, data were sourced from the Central Bank Statistical Bulletin; on various issues .
stock Market Performance and Economic growth in Nigeria.
Abstract This study examines the impact of the Nigerian capital market on economic growth from the period of 1991-2010. The economic growth was proxied by Gross Domestic Product (GDP) while the capital market variables considered include; Market Capitalization (MCAP), All Share Index (ASI), Value of Transactions (VTS), and Total New Issues (TNI). Secondary data was collected from Security and Exchange Commission reports, National Bureau of statistics and Central Bank of Nigeria Statistical Bulletin. Descriptive statistics, Pearson correlation and multiple regression analysis are used to analyze the data. The result shows that, Gross Domestic Product (GDP) has a positive relationship with Market Capitalization, All Share Index, Value of Transactions, and Total New Issues. It is recommended therefore that that government should put up measures to build up investors’ confidence in the capital market; also the regulatory authority should initiate policies that would encourage more companies to access the market.
Stock exchange market activities and Economic Development: Evidence from the Nigerian economy
RePEc: Research Papers in Economics, 2020
The study examined the impact of stock exchange market activities on economic development in Nigerian economy. The study employs multiple regressions as a technique to measure the effect of stock exchange market development on the Nigerian economy. The Secondary Data used were into market capitalization (CAP), all share index (ALLSHARE) and total volume of transaction (TNOV) and were sourced from the Central Bank of Nigeria (CBN) statistical bulletin, 2019. The technique of data analysis used was the ordinary least square (OLS) method of estimation. Findings reveals that the market capitalization (CAP) had a positive relationship with GDP, with the relationship being statistically insignificant. ALLSHARE has a positive and significant relationship with GDP. TNOV has a positive and significant relationship with GDP. Therefore, it was recommended that Government should help to restore confidence to the market through regulatory authorities which will portray transparency, fair trading transactions and dealing in the stock exchange and consequently improve economic development. The SEC and NSE should put a very good advocacy programme in place to encourage and awaken Nigerians' interest in the capital market as this will boost local participation in the market and as well enable local investors to absorb shares offloaded by foreign investors any time there was perceived economic instability.
Stock Market Development and Economic Growth in Nigeria : An Empirical Examination ( 1985 - 2014 )
Journal of Policy and Development Studies, 2015
This study examined the effect of stock market development on Nigeria's economic growth. The objective of the study was to determine if stock market development significantly impact on the country's economic growth. Secondary data were employed for the study covering 1985 to 2014. Ordinary Least Square (OLS) econometric technique was used for the time series analysis in which variations in economic growth was regressed on market capitalisation ratio to GDP, value of stock traded ratio to GDP, trade openness and inflation rate. The analysis revealed that stock market has the potentials of growth inducing, but has not contributed meaningfully to Nigerian economic growth, since only 26.5% of variations in economic growth were explained by the stock market development variables. Based on this, the study suggests for an encouragement of more investors in the market, improvement in the settlement system and ensuring investors' confidence in the market.
Nigerian stock exchange and economic development
The need to critically analyze the efficiency of capital market on the Nigerian economy for the period between 1979 and 2008 as a reference point for developing economies is the bedrock of this work. The results indicate that the stock market indeed contributes to economic growth as all variables conformed to expectation. The Nigerian Stock Exchange has not been having the best of times as an aftermath of the global financial crisis after an unprecedented surge in returns on investment which has resulted in a continuous downturn in market capitalization. Multiple regression method of econometric analysis was used for the work. The major findings revealed a negative relationship between the market capitalization and the Gross Domestic Product as well as a negative relationship between the turnover ratio and the Gross Domestic Product while a positive relationship was observed between the all-share index and the Gross Domestic Product. These findings led to some policy formulations aimed at an improved and developed market for potential gain to the benefit of rational investors even across national borders.
Research on the Impact of Stock Market Development on Real Economic Growth in Nigeria
Saudi Journal of Finance and Economics , 2020
This paper investigates the impact of stock market development on real economic growth in Nigeria. The Johansen Cointegration and vector error correction model (VECM) were used to analyze annual time series data on stock market development indicators and real gross domestic product (GDP) from 1984 to 2018. The results show a long run relationship between stock market development and economic growth in Nigeria. In the long run, market capitalization ratio, all share index and rediscount rate have significant positive effect on GDP, whereas market turnover ratio, and trade openness have strong negative influence on GDP. Results also show evidence of causality effects running from stock market development to real GDP. The paper concludes that stock market development is important for economic growth in Nigeria. The paper recommends that government promote stable economic and political environment, strengthen the regulation and supervision of the stock market, streamline market processes, improve trading system, and increase investment in manufacturing and logistics infrastructure.