Effect of Capital Market on Economic Growth in Nigeria

Enekwe, Chinedu Innocent and Eziedo, Kenneth Nnagbogu and Agu, Charles Ikechukwu (2018) Effect of Capital Market on Economic Growth in Nigeria. GOUni Journal of Management and Social Sciences, 4 (1). pp. 33-46. ISSN 2550-7265

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Capital Market has been identified as an institution that contributes to the socio-economic growth and development of emerging economies. Due to the recent financial crises, the researcher cannot be enabling to investigate the extent to which capital market has affected the economic growth in Nigeria. The primary objective of this study is to examine the effect of the Nigerian capital market on the economic development in Nigeria. The economic growth was proxy by Gross Domestic Product (GDP) while the capital market variables considered include; market capitalization (MCAP), Number of listed securities (NLS), and Total value of securities traded (TVST). Three research questions and six hypotheses were raised in the course of this research. The Ex-post facto research design was used for this study. Secondary data was obtained from the annual report and financial statement from Nigerian stock exchange and central bank of Nigeria over a period of 30 years (1981-2012) and was analyzed using descriptive statistics, Pearson correlation and multiple regressions. The findings indicate that economic growth is significantly influenced by only MCAP. The factor that does not significantly influence economic development is, NLS and TVST. This is a clear indication that the capital market is a tool for economic development of the country. The evidence from this study reveals that the activities in the capital market tend to impact positively on the economy but not to the extent it is supposed to. It is recommended therefore that the regulatory authority should introduce ICT policies to encourage more companies to access the market and also be more proactive in their surveillance role in order to check sharp practices which undermine market integrity and erode investors’ confidence.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
L Education > L Education (General)
Divisions: Faculty of Management and Social Sciences
Depositing User: GOUNI ICT
Date Deposited: 14 May 2018 10:10
Last Modified: 14 May 2018 10:10
URI: http://eprints.gouni.edu.ng/id/eprint/55

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