Determinants of Stock Market Development in Nigeria: A Cointegration Approach

Ayunku, Peter E.; Etale, Lyndon M.

doi:10.9734/air/2015/12912

Cited by 5 publications

(3 citation statements)

References 8 publications

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“…A well-developed stock market is promoted by a combination of factors such as sound macroeconomic or fiscal policies, structural growth, and the availability of strong legal and regulatory structures (Tsaurai, 2018). Ayunku and Etale (2015) investigated stock market development determinants for the period 1977-2010, using ex-post facto research design and the use of the Johansen Co-integration and error correction method. The empirical result shows that market capitalization, private sector credit, and exchange rates are significant determinants of Nigeria"s long-term and short-term stock market growth.…”

Section: Stock Market Developmentmentioning

confidence: 99%

Correlates of Stock Market Development and Economic Growth: A Confirmatory Study from Ghana

Borteye¹,

Peprah²

2022

IJEF

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The study confirms the debate on whether stock market development correlates to economic growth. The dimensions used for the stock market development consisted of market liquidity, size, and capitalization. Economic growth was represented by the real gross domestic product (GDP) growth rate. Based on secondary data obtained from the Ghana Stock Exchange (GSE) and Ghana Statistical Service from 2014 to 2018, a correlational research design was adopted to analyze the data with SPSS 20v by using bivariate and regression. The study found that there is a high positive relationship between market liquidity and economic growth, a moderate negative relationship between market size and economic growth, and a moderate positive relationship between market capitalization and economic growth. Also, the stock market development of market liquidity, size, and capitalization predict 95.7 percent of economic growth. The study summarized that there is a high positive association between stock market development and economic growth as a confirmatory revelation, but all the relationship results were not statistically significant. The result points to the casualty of the relationship between stock market development and economic growth. The study recommends that more firms must be encouraged to be listed on GSE to enhance economic growth in Ghana.

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Section: Stock Market Developmentmentioning

confidence: 99%

Correlates of Stock Market Development and Economic Growth: A Confirmatory Study from Ghana

Borteye¹,

Peprah²

2022

IJEF

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“…The study also showed that GDP, inflation and Treasury bill rates have insignificant relationship with stock market returns. Ayunku and Etale (2015) employed the secondary data sourced from CBN statistical bulletin from 1977 to 2010 to investigate the determinants of stock market development in Nigeria. Findings from the study showed that market capitalization, credit to private sector and exchange rate are the predictors of stock market development.…”

Section: Literature Reviewmentioning

confidence: 99%

External macroeconomic shocks and stock price behavior in Nigeria

Saliu

2021

IJRBS

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This research work investigates the relationship between external macroeconomic shocks and stock price behavior in Nigeria. Variables such as exchange rate (EXR), US real interest rate (USRINTR), and world oil price (WOP) are adopted to capture external macroeconomic shocks while all share price index is used to proxy stock price. The research work uses Johansen cointegration and structural vector autoregressive model as the estimation method. Findings from the study confirm that no long-term co-movement exists between the stock price and the selected external shocks. Findings from the study equally show that both US real interest rate (USRINTR) and world oil price (WOP) are the major external shock predictors of the stock price in Nigeria.

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“…This is because of the macroecoecomic inducement of variables like the comparative low interest rate, closure of the border, and timely approval of 2020 budget, reduced valuations of companies based on their fundamentals and banks application of 65% loan to deposit Ratio (LDR) at year end within the economy and equity prices, all things being equal. Other relevant studies which had made meaningful impact on macroeconomic factors that influence stock market development were: (John & Duke II, 2013;Garcia & Liu, 1999;Ayunku & Etale;Umar, Gambo, Dayyaby & Darussalam, 2015;Udoka, Nya &Bassey, 2018;Tarus, 2012;Tsurai, 2018 andAzeez &Obalade, 2019). Few other scholars laid emphasis on both macroeconomic factors and institutional qualities of stock market development (Cherif & Gazdar, 2010;and Acquah-Sam, 2016).…”

Section: Introductionmentioning

confidence: 99%

Analyses of Macroeconomic Drivers of Stock Market Development in Nigeria

Obeten OKOI,

Ugboaku IHEANACHO,

Gbenga LAWAL

2022

AKSUJOMAS

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The paper investigates the long run and short run relationship between the endogenous variable (stock market development) and exogenous variables (economic growth, banking sector development, inflation, stock market liquidity and trade openness) in Nigeria. Annual data were collected using desk survey approach. Autoregressive Distributed Lag (ARDL) test and ARDL error correction regression model was used after preliminary tests were carried out to ascertain stationarity properties. From the result of the analyses, it was discovered that gross domestic product, domestic credit to private sector and trade openness has negative impact on Nigeria stock market development in the long run, whereas inflation rate and total value of shares traded had a positive impact on the development of the Nigeria stock market in the long run. The results suggested that domestic credit to private sector, stock market liquidity, ratio of credit to private sector, total value of traded stock as well as ratio of trade openness are key drivers of stock market development in Nigeria. As part of recommendations, government should strengthen and solve the weaknesses affecting development of Nigeria’s stock market. Policy makers should pursue those policies that stimulate banking sector development so as to promote immediate development of the stock market and government should intensify efforts in stability of inflation rate so as to promote stock market development in the long- run.

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Determinants of Stock Market Development in Nigeria: A Cointegration Approach

Cited by 5 publications

References 8 publications

Correlates of Stock Market Development and Economic Growth: A Confirmatory Study from Ghana

Correlates of Stock Market Development and Economic Growth: A Confirmatory Study from Ghana

External macroeconomic shocks and stock price behavior in Nigeria

Analyses of Macroeconomic Drivers of Stock Market Development in Nigeria

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