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The Effect of Some Macroeconomic Variables on Stock Market Performance in Nigeria

Author

Listed:
  • Deborah M. Adesokan

    (Department of Economics, Redeemer’s University, P.M.B. 230, Ede, Osun State, Nigeria)

  • Olatokunbo A. Oluwayemisi

    (Department of Economics, Redeemer’s University, P.M.B. 230, Ede, Osun State, Nigeria)

  • Oluwayemisi K. Adeleke

    (Department of Economics, Redeemer’s University, P.M.B. 230, Ede, Osun State, Nigeria)

  • Segun M. Ojo

    (Department of Economics, Redeemer’s University, P.M.B. 230, Ede, Osun State, Nigeria)

Abstract

This study critically examined the effect of some macroeconomic variables on stock market performance in Nigeria from the years 1993-2020 using the Auto Regressive distributed lag (ARDL) technique. The macroeconomic variables used in this study are inflation (INF), gross domestic product (GDP), interest rate (INT), exchange rate (EXR) and money supply (MS). This study observed that INF, which is an important variable in the model, affects Stock market performance negatively. It was also observed that GDP has a positive relationship with Stock market performance and it is statistically insignificant which implies that increase in gross domestic product leads to a decrease in stock market performance. The study also observed a negative relationship between exchange rate and stock market and is statistically insignificant which means that an increase in exchange rate would reduce stock market performance. Interest rate also had a positive relationship with stock market performance and is statistically insignificant which implies that an increase in interest rate would reduce stock market performance. Money supply was observed to have a positive relationship with stock market performance and it is statistically significant and an increase in money supply would lead to an increase in stock market performance.

Suggested Citation

  • Deborah M. Adesokan & Olatokunbo A. Oluwayemisi & Oluwayemisi K. Adeleke & Segun M. Ojo, 2025. "The Effect of Some Macroeconomic Variables on Stock Market Performance in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(15), pages 471-483, April.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:15:p:471-483
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    References listed on IDEAS

    as
    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Augustine O. Jacob & Saviour S. Udo & Ferdinand I. Odey, 2022. "Effects Of Selected Macroeconomic Variables On Stock Market Performance In Nigeria," Malaysian E Commerce Journal (MECJ), Zibeline International Publishing, vol. 6(2), pages 54-58, June.
    3. Izunobi Anthony Okechukwu & Nzotta Samuel Mbadike & Ugwuanyim Geoffrey & Benedict Anayochukwu Ozurumba, 2019. "Effects of Exchange Rate, Interest Rate, and Inflation on Stock Market Returns Volatility in Nigeria," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 5(6), pages 38-47, September.
    4. Iorember, Paul & Sokpo, Joseph & Usar, Terzungwe, 2017. "Inflation and Stock Market Returns Volatility: Evidence from the Nigerian Stock Exchange 1995Q1-2016Q4: An E-GARCH Approach," MPRA Paper 85656, University Library of Munich, Germany.
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