Stock Market Performance and Sustainable Economic Growth in Nigeria: A Bounds Testing Co-integration Approach

Abstract

The study examined the relationship between stock market performance and economic growth in Nigeria. It utilized the bounds testing co-integration procedure also known as autoregressive distributed lag estimation procedure. The empirical model combined key stock market indicators and some traditional macroeconomic variables to estimate the hypothesized relationship in the study. It found that in the long-run, overall output in the Nigerian economy is less sensitive to changes in stock market capitalization as well as the average dividend yield thereby casting doubt on the ability of the Nigerian stock market in its present level of development to serve as a barometer for measuring or predicting the overall health of the Nigerian economy as well as its direction over the long-run horizon. The other major finding in the study is that the long-run growth of the Nigerian economy is highly sensitive to marginal variations in interest rate which is suggestive that macroeconomic variables in the country are at present more useful in shaping the long-run direction of the Nigerian economy.

Effects of Technological Diffusion and Access to Electricity on Employment in Nigeria

“…According to Okodua and Ewetan (2013), ARDL process starts with ascertaining the significance of lagged variable coefficients in their error correction model (ECM) via associated F-statistics. Pesaran et al (1999) gave a table containing relevant critical figures for several volume of regressors to overcome difficulties connected to non-standardised forms of asymptotic distribution for automatically calculated F-statistics regardless of I(1) or I(0) status.…”

Stock Market Activities and Economic Growth in Nigeria: A Cointegration Approach

“…Equally, Okodua & Ewetan (2013) examined the influence of stock market performance and sustainable economic growth in Nigeria using the Autoregressive Distributed Lag estimation technique and the result revealed that economic growth is insignificant to stock market performance. Okoye & Nwisienyi (2013) examined the influence of stock market on economic growth in Nigeria using multiple regression analysis on annual data such as all share index, market value, capitalisation and GDP between 2000 and 2010.…”

An Empirical Analysis of Financial Sector Development and Savings Mobilization in Nigeria: ECM Analysis

“…Financial development connotes improvements in the functioning of the financial sector. These include increased access to financial intermediation, greater diversification opportunities, improved information quality, and better incentives for prudent lending and monitoring [4,5,6]. The purpose of this study is to empirically examine the relationship between financial sector reformed and domestic saving mobilization in Nigeria.…”