Economic Growth And Capital Market Development In Nigeria An Appraisal (original) (raw)

The Effect of Capital Market on Economic Growth in Nigeria (2000-2020)

Global academic journal of economics and business, 2022

This study examined the capital market and its impact on the Nigeria economy with emphasis on the stock exchange (2000-2020). Gross domestic product was used to proxy Nigeria economy while market capitalization, all share index, total number of deals on the Nigeria stock exchange and value of transaction on the Nigeria stock exchange were used as proxies for capital market. The Ex-post Facto research design was adopted in this study. Data on gross domestic product, all share index, total number of deals on the Nigeria stock exchange, market capitalization and value of transaction on the Nigeria stock exchange were obtained from the Central Bank of Nigeria (CBN) Statistical bulletin (2020). The data in this study was analyzed using the Ordinary Least Square regression method. The findings revealed that gross domestic product has a significant relationship on market capitalization, all share index, total number of deals on the Nigeria stock exchange and value of transaction on the Nigeria stock exchange. The researcher recommended that government should expand the technological based of the Nigerian capital market in order to further improve transactions and dealings, which could enhance internationalization and competitiveness of the market.

Capital Market and Economic Growth in Nigeria an Empirical Analysis

IOSR Journal of Humanities and Social Science, 2013

This study seeks to determine the impact of capital market on economic growth in Nigeria using using annual data from 1981 to 2010. In our empirical analysis, we run an ordinary least square test to verify the statistical significance of the variables used and vector auto regression technique to determine the long run relationship within the variables in our study. Empirical investigations revealed that two variables are statistically significant at 10% and these variables are market index and market capitalization. Also the coefficient value of these two variables suggest that a percentage increase in market index and market capitalization will bring about on the average 33.7 and 44.8 percentage increase in reel GDP. Our findings based on johanson (1995)co-integration technique and vector auto regression suggest three co-integrating equation at 5% level of significant while the vector auto regression suggest the existence of long run relationship between stock market and reel GDP and the stability in the system was also determined through the vector autoregressive technique. We therefore recommends that There is also need to restore confidence to the market by regulatory authorities through ensuring transparency and fair trading transaction and dealing in the stock exchange. It must also address the reported case of abuse and sharp practices by some companies in the market. There is also the need to boost the value of transactions in the Nigerian capital market, there is need for availability of more investment instruments such as derivatives, convertibles, future, and swaps options in the market. Given the present political dispensation, all the tiers of government should be encourage to fund their realistic developmental programme through the capital market. This will served as a leeway to freeing the resources that may be used in other sphere of the economy.

Capital Market Development and Economic Growth in Nigeria: A Re-examination

2020

Efficient and effective capital market is one of the essential ingredients of economic growth and development. Without an efficient capital market, mobilization of savings and investment of such savings on long term basis; economic development of a nation may be hinder. Capital market as a major part of financial market which serves as a pivot to service the deficit unit, is very critical to economic growth. This paper re-examines the Nigerian capital market and its impact of economic growth using Autoregressive Distributive lag (ARDL). Employing data from Nigerian Security and Exchange Commission, Central Bank of Nigeria and Nigerian Stock Exchange from 1981-2016, it found that in the long run, accumulated effect of market capitalization and value of stock on economic growth is negative and statistically significant. By inference, market capitalization and value of transactions in the Nigeria stock market may not be considered adequate. It also found that volume of transaction in t...

Impact of Capital Market Development on the Growth of the Nigerian Economy

2016

This paper investigates the relationship between capital market development and economic growth using data on GDP (proxy for economic growth), market capitalization ratio, value traded ratio and stock market turnover ratio (proxies for capital market development) over the period 1981-2014. Employing the econometric methodology of the vector error correction model, the study shows that in the short-run, market capitalization ratio and turnover ratio have significant negative effect on aggregate national output (GDP). The study also shows positive effect of value traded ratio as well as negative effect of inflation rate on GDP though not significant. The long-run estimate shows that all the exogenous variables have significant negative impact on GDP and that changes in market capitalization ratio, value traded ratio and turnover ratio produce more than proportionate changes in GDP. With an adjustment speed of about 91.12 per cent, the model presents an inherent capacity to overcome sh...

CAPITAL MARKET CAPITALIZATION AND ECONOMIC GROWTH IN NIGERIA: AN ECONOMETRICS ANALYSIS

Article, 2023

There is no doubt that capital market capitalization plays an essential role in economic growth of any nation and increasing access to a developed capital market is essential to unlocking rapid economic growth in Nigeria. Consequently, this paper has empirically examined the nexus between capital market capitalization and economic growth in Nigeria using annual time series data for the period 1990-2021. By applying Augmented Dickey Fuller, OLS, cointegration and causality tests the results indicate that there is a positive and significant relationship between capital market capitalization and economic growth, there is a long-run relationship between the variables and also unidirectional causality was found from MCAP to GDPG. Subsequently, the paper recommends that policy makers should concentrate on implementing short-term and long-term policies that will develop the Nigerian financial system especially the capital market since it is capable of boosting economic growth in Nigeria.

International Journal of Social Science and Economic Research IMPACT OF NIGERIAN CAPITAL MARKET ON ECONOMIC GROWTH: A CO-INTEGRATION APPROACH 7/12/2016

This study examined the impact of economic growth and development in Nigeria using vector error correction model to examine the long-run relationship between the capital market development and economic growth, the study used annual series from 1970 to 2013. Variables such as Gross Domestic Product (GDP), Market Capitalization (MCAP), Total New Issues(TNI and Value of Share Traded Total Listed Equity (VST) are used for the study. The empirical results indicate a long-run relationship between the capital market development and economic growth in Nigeria. Meanwhile, ECMt coefficient confirmed that, there is long run equilibrium between GDP and Capital Market Variables i.e at every 1 million increase in Capital Market Variable, GDP will increase by 0.085 million since the speed of adjustment to equilibrium is 0.0857. The Granger causality results at lag 2 showed that market capitalization and value of shares traded granger causes real GDP with no reverse or feedback effect.

Impact of Capital Market on Economic Growth in Nigeria

Business and Management Research, 2020

This study on “Impact of Capital Market on Economic Growth in Nigeria” is aimed to access the impact and determinant of capital market on the economic growth in Nigeria within the period of study. It further employed the ordinary least square method (OLS) in analyzing the time series variables obtained for the study. The result of the findings show that all the variables of interest were significant in explaining the behavior of capital market on the growth of Nigeria Economy except Labour force. more so, the result show that the the model employed for the analysis is adequate and best in fitting the variables obtained. Further more, necessary recommendations were made to enable the government come up with a favorable policies in which will make for improvement in the standard of living.

Empirical Analysis on the Relationship between Capital Market and Economic Growth in Nigeria

Journal of Asian Business Strategy, 2018

Capital can be categorized into human and material capital, the latter in its liquid form helps in the allocation and mobilization of savings. This study investigates the relationship between capital market and performance of Nigeria economy, gross domestic product was used to proxy performance of Nigeria economy while capital market was proxied by market capitalization, all share index and total value of transaction. Time series data between the period of 1985 to 2017 was sourced from Central Bank of Nigeria, and statistical bulletin 2018. The study made use of descriptive statistics, Phillip Peron, unit root test, Johansen Co-integration, granger causality test and vector error correction estimate. Based on the findings of the vector error correction estimate, the study, therefore, recommends that there is a need for the free flow of information, this can be achieved by increasing the publicity of market information, as this will increase the volume of transactions in the market. Contribution/ Originality: This study contributes to the existing literature by examining the relationship between capital market and economic growth in Nigeria 1. INTRODUCTION Capital market is an avenue that creates a market for the sale of long-term equity and debt, the financial market is charged with the duty of mobilizing and channeling long-term funds to profitable investments, it also acts as an intermediary in fund mobilization and distribution. Ali and Yap (2016), this market also helps in boosting economic transactions in the country, in this market, stock and bond are sold by private individuals and government respectively in order to raise capital to finance ideas and innovation. This market mobilizes and harnesses long-term funds from the surplus economic spenders, making it readily available to the deficit economic unit in the economy. A well-functioning stock exchange market is a prerequisite for the active participation of foreign investors in the capital market reasons being that they help in fast-tracking liquidity and capital allocation in any economy (Block & Hirt, 1992). Mohtadi and Agarwal (2004) opined that the

Empirical analysis of the impact of capital market on economic growth in Nigeria (1980-2010)

2014

The Nigerian capital market had not been performing effectively in terms of providing long term capital needed by firms to finance capital projects. This cast doubts on its ability to meaningfully enhance the growth of the economy against the apriori expectations amidst different reforms that were introduced by the government. This study examines the effectiveness of the Nigerian capital market in stimulating economic growth in Nigeria using secondary data relating to GDP [Gross Domestic Product] as well as new issues, volume of transactions and market capitalization of the Nigerian Stock Exchange between 1980-2010 which were formulated into an over parameterized error correction models (ECM 1 ) and ECM 2 ) and analysed using residual plots, Granger causality test, Johansen co-integration test and Augmented Dickey-Fuller unit root test. The study reveals that the capital market enhances capital formation with a positive impact on Nigerian economic growth and recommends that the regu...

CAPITAL MARKET AS A CATALYST FOR ECONOMIC GROWTH: NIGERIA IN PERSPECTIVE

PalArch's Journal of Achaelogy of Egypt/Egyptology, 2020

The growth of a nation has a related alliance with a capital market that drives the economy and a solid financial base for expansion and development. This research examines the efficiency and effectiveness of the Nigerian capital market as a catalyst for economic growth; this means that the performance of the stock market is an impetus for economic growth and development. This research study involved the use of a questionnaire to collect first-hand data from one hundred and eight (108) respondents. The data collected were analyzed using descriptive statistics such as percentages while the hypotheses were analyzed using chisquare and the appropriate level of confidence (0.05). Finding from the research study showed that the Nigerian capital market and economic growth are integrated, this implies that a long-run relationship exists between capital market and economic growth in Nigerian. Therefore the government must contribute to achieving these objectives through investing government securities in productive sectors and receiving laws that spell threat to the capital market. It is recommended therefore that the regulatory authority should initiate policies that would encourage more companies to access the market and also be more proactive in their surveillance role to check sharp practices which undermine market integrity and erode investors' confidence