Capital market efficiency and economic growth in Nigeria

Ovat, Okey O.

doi:10.4314/gjss.v7i2.48843

Cited by 1 publication

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“…Based on these results, the paper argues that stock markets could help promote growth in Africa. Nyasha and Odhiambo (2014), Ovat (2012), Vacu (2013) and Osakwe and Ananwude (2017) investigated the effect of stock market development on economic growth on the African economy. The study separated stock market development into stock market size and stock market liquidity to highlight stock market development as the key drivers to growth using econometric techniques.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In Nigeria, there is a weak evidence of growth-led finance using market size as indicator of stock market development. Based on these results, the paper argues that stock markets could help promote growth in Africa Nyasha and Odhiambo (2014),Ovat (2012),Vacu (2013). andOsakwe and Ananwude (2017) investigated the effect of stock market development on economic growth on the African economy.…”

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confidence: 99%

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Stock market development and economic growth in sub-Saharan Africa (1990–2020): an ARDL approach

Thaddeus

Ngong

Nnecka

et al. 2022

JEAS

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PurposeThe purpose of this paper is to investigate the short and long run causal relationship between stock market development and economic growth in sub-Saharan Africa within the period 1990 and 2020.Design/methodology/approachUsing panel data from 1990–2020 obtained from the World Bank development indicators, the study makes use of the autoregressive distributed lag model and the Granger causality and cointegration to analyze the long and short run causal relationship between stock market development and economic growth in sub-Saharan Africa.FindingsThe findings unveiled that stock market capitalization had a positive and significant effect on economic growth in the long run and a negative insignificant effect in the short run within the period of 1990–2020 while stock market liquidity measured through total value of shares traded and turnover ratio had a negative and significant effect on economic growth in sub-Saharan Africa within the period of 1990–2020. The Granger causality test showed an inconclusive result between stock market development and economic growth; implying that the authors cannot say if it is stock market development that causes economic growth or it is economic growth that causes stock market development within the period of 1990–2020.Practical implicationsThe findings suggest that governments of sub-Saharan African countries should encourage stock market development by implementing favorable rules for companies listing on their stock market, promote stock market integration with world markets to diversify risk, increase public awareness on stock markets, increase investors' confidence level and finally, remove stock market impediments like high taxes, legal and regulatory barriers to its development.Originality/valueThis study contributes to the existing literature by offering a whole new perspective on stock market development and economic growth since its conception in sub-Saharan Africa. Again, contrary to other papers, the study show how stock market development can contribute to the growth of sub-Saharan Africans’ economy.

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Section: Literature Reviewmentioning

confidence: 99%

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confidence: 99%