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Does Stock Market Development Raise Economic Growth? Evidence from Nigeria

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  • Abu Nurudeen

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

Abstract

This paper investigates whether stock market development raises economic growth in Nigeria, by employing the error correction approach. The econometric results indicate that stock market development (market capitalization-GDP ratio) increases economic growth. The recommendations therein include - removal of impediments to stock market development which include tax, legal, and regulatory barriers; development of the nation's infrastructure to create an enabling environment for where business can strive; employment of policies that will increase the productivity and efficiency of firms as well encourage them to access capital on the stock market; enhancement of the capacity of the Nigeria Security and Exchange Commission to facilitate the growth of the stock market, restore the confidence of stock market participants and safeguard the interest of shareholders by checking sharp practices of market operators (particularly speculators).

Suggested Citation

  • 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.
  • Handle: RePEc:rfb:journl:v:01:y:2009:i:1:p:015-026
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    References listed on IDEAS

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    Cited by:

    1. Nyasha S. & Odhiambo N. M., 2016. "The Impact of Bank-Based and Market-Based Financial Development on Economic Growth: Time-Series Evidence From the United Kingdom," Global Economy Journal, De Gruyter, vol. 16(2), pages 389-410, June.
    2. Sheilla Nyasha & Nicholas M. Odhiambo, 2016. "Financial Systems and Economic Growth: Empirical Evidence from Australia," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(2), June.
    3. Orajaka Ugochukwu Paul & Okeke Chinedu Prince, 2017. "Inflationary Trend and its Impact on Nigeria Stock Exchange Market," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 127-140, November.
    4. Rebecca Attah-Annor & Alhassan Bunyaminu, 2016. "Effect of Stock Market Dynamics on Economic Growth: Evidence from Ghana Stock Exchange," International Journal of Financial Markets, Research Academy of Social Sciences, vol. 2(3), pages 69-93.
    5. Sheilla Nyasha & Nicholas M. Odhiambo, 2015. "The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(1), March.
    6. Pius V. C. Okoye & Jane F. N. Okoye & Raymond A. Ezejiofor, 2015. "The Impact of Capital Market Efficiency as a Panacea to the Economic Growth in Nigeria," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 4(3), pages 122-134.
    7. Babatunde Akinmade & Festus Fatai Adedoyin & Festus Victor Bekun, 2020. "The impact of stock market manipulation on Nigeria’s economic performance," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-28, December.
    8. Oseni, Isiaq & Akpa, Emeka & Aberu, Felix, 2018. "Does Stock Market impact on the Growth of Nigerian Economy using 3SLS Analysis?," MPRA Paper 92285, University Library of Munich, Germany.
    9. Martins Iyoboyi, 2013. "Bank and Non-Bank Financial Deepening and Economic Growth: The Nigerian Experience (1981–2010)," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 42(3), pages 247-272, November.
    10. Iqbal, Athar & Khan, Muhammad Irfan & Riaz, Samina, 2017. "The Causality between Equity Market Development and Economic Growth: An Egg and Chicken Problem?," MPRA Paper 103038, University Library of Munich, Germany, revised 30 Dec 2017.
    11. Sheilla Nyasha & Nicholas M. Odhiambo, 2017. "Banks, Stock Market Development and Economic Growth in Kenya: An Empirical Investigation," Journal of African Business, Taylor & Francis Journals, vol. 18(1), pages 1-23, January.
    12. Gladys A. A. Nabieu & Charles Barnor, 2016. "The Effect of Stock Market Performance on Economic Growth in Ghana," International Journal of Financial Economics, Research Academy of Social Sciences, vol. 5(1), pages 12-32.
    13. Nyasha, Sheilla & Odhiambo, Nicholas M., 2015. "Do financial systems spur economic growth in the USA? An empirical investigation," Working Papers 18833, University of South Africa, Department of Economics.
    14. Dr. Adesola Adebayo Akande, 2018. "Global Economic Crisis Effect on Shareholders’ Wealth in Agro - Allied Industries in Nigeria," Sumerianz Journal of Business Management and Marketing, Sumerianz Publication, vol. 1(2), pages 47-51, 05-2018.

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