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Impact of the Capital Market on the Nigerian Economic Growth

Author

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  • Yusau Audu Abayomi

    (Department of Business Administration and Management Science, Federal Polytechnic, Kaura-Namoda., Nigeria)

  • Umoru Adejo Yakubu

    (Department of Business Administration and Management Science, Federal Polytechnic, Kaura-Namoda., Nigeria)

Abstract

This study examines the impact of the capital market on the economic growth of Nigeria. Time-series of data on Gross Domestic Product, Equity, Government stock, Bond and Preference shares as well as foreign direct investment between 1985 and 2019 were collected from the CBN statistical bulletin, the SEC bulletin and the World Economic Indicators. The Autoregressive Distributed Lag (ARDL) model was used with the aid of E-view 10. The result of the analysis reveals a long-run relationship between economic growth and the capital market. ARDL bound test shows equity, government stock has a significant positive relationship with economic growth while foreign direct investment and bonds & preference shares have an insignificant negative relationship with economic growth. The (ECM) indicates yearly convergence of approximately 44 % of short-run shock or disequilibrium is corrected. It is therefore recommended that the government through the NSE policies should be geared to encourage more private limited liability companies and informal sector operators to access the market for fresh (equity) capital and the government should curtail the spate of insecurity to boost investor confidence in the Nigerian business environment.

Suggested Citation

  • Yusau Audu Abayomi & Umoru Adejo Yakubu, 2022. "Impact of the Capital Market on the Nigerian Economic Growth," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(6), pages 13-19, June.
    • Handle: RePEc:bcp:journl:v:6:y:2022:i:6:p:13-19
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    References listed on IDEAS

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    1. Abu Nurudeen, 2009. "Does Stock Market Development Raise Economic Growth? Evidence from Nigeria," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 1(1), pages 015-026, December.
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