Capital Market Performance as a Panacea for Economic Growth in Nigeria

Abstract

The paper examined capital market performance as a panacea for economic growth in Nigeria from 1986-2016. A number of related literatures have shown that the Nigerian capital market variables studied has satisfactory market performance and has contributed to economic growth. Yet some researchers observed that the capital market has not significantly mobilized and effectively channeled substantial capital to the real sector of the economy. What could have been the reason for the divergences? The study was anchored on the demand following hypothesis. Secondary data were sourced from Central Bank of Nigeria Statistical Bulletin and Nigeria Stock Exchange fact-book of various editions. The paper adopted the ex-post facto research design while ordinary least square regression techniques was used to process the data gathered using E-views 9.0 software. The null hypotheses (Ho) were tested at 5% level of significance. The findings of the paper revealed that there is negative and insignificant relationship between capital market and the variables studied. The paper conclude that liquidity of the capital market is pivotal for economic growth in Nigeria while the study recommended that all tiers of government should be encouraged to fund their realistic long term developmental program through the Nigeria capital market.

Impact of capital market performance on economic growth in Nigeria: a systematic review

“…In fourth place among the themes is Capital market performance having 5 selected articles for the systematic review. The findings show that capital market performance had a negative and insignificant relationship among some of the variables used (Emmanuel & Elizabeth, 2020).…”

“…Another proxy total volume of transactions is captured quarterly by the NSE and it is a figure that shows the total volume of shares exchanged on the stock market and was captured as NGN15.84bn as at quarter 3 2020 by the NSE. The volume of transactions or volume of stocks traded represents the volume of stocks traded within a time frame on the Nigerian Stock Exchange trading floor, a large volume indicates added trading activities on the floor of the exchange (Emmanuel & Elizabeth, 2020).…”

“…Liquidity is seen from the angle of the level of easiness that shares are exchanged in the stock market i.e., total securities traded (Adigwe et al, 2015). Value of transactions gauge complements market capitalisation because it shows if the market size is utilised by trading, an improvement in the value of trades promote economic growth (Odo et al, 2017;Emmanuel & Elizabeth, 2020).…”

Impact of capital market performance on economic growth: An assessment from Nigeria

“…Liquidity is also seen as the level of ease that shares are exchanged in the capital market i.e., total securities traded (Adigwe et al, 2015). The value of transactions indicator complements market capitalisation because it shows if the market size is utilised by trading, due to the fact an upsurge in the value of dealings promote economic growth (Odo et al, 2017;Emmanuel and Elizabeth, 2020).…”

Research on the Impact of Stock Market Development on Real Economic Growth in Nigeria

“…For instance, Olabisi et al [28] describes the demand for stock market services as a derived demand. Other authors believe that stock market development is unimportant for economic growth [29][30][31].…”