IDEAS home Printed from https://ideas.repec.org/a/rss/jnljee/v5i2p1.html
   My bibliography  Save this article

Determinants of Stock Trading Volume in Nigeria: Money Demand Approach

Author

Listed:
  • Saibu Olufemi Muibi
  • Alenoghena Raymond Osi
  • Olaniyi Evans
  • Tewogbade Seun

Abstract

This study has investigated the determinants of stock trading volume using the demand for money approach. In order to establish the magnitude and direction of relationship between stock trading volume and other macroeconomic variables such as broad money, interest rate, foreign direct investment, exchange rate, income and global financial crisis for the period 1985 to 2014, an ARDL model was set up. The results showed that the exogenous variables studied have long run equilibrium relationship with the volume of transactions in the stock exchange. Specifically, while money supply exhibited strong positive significant relationship with stock volume, interest rate and exchange rate impact was negative and significant. The impact of income and foreign direct investment was positive but not significant. The dynamic error correction model shows that the system converges back to equilibrium at a speed of 41.3%. The CUSUM test reveals that irrespective of the downward trend in the volume of trading on the exchange in Nigeria for the period, stock trading volume has remained stable. The study recommends that policy makers in the country should take into account the influence of money supply, interest rate and exchange rate in the course of planning the target volume level of trading transactions on the floor of the Nigerian Stock Exchange.

Suggested Citation

  • Saibu Olufemi Muibi & Alenoghena Raymond Osi & Olaniyi Evans & Tewogbade Seun, 2016. "Determinants of Stock Trading Volume in Nigeria: Money Demand Approach," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 5(2), pages 74-89.
  • Handle: RePEc:rss:jnljee:v5i2p1
    as

    Download full text from publisher

    File URL: http://rassweb.org/admin/pages/ResearchPapers/Paper%201_1497039392.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Evans Olaniyi, 2017. "Back to the Land: The Impact of Financial Inclusion on Agriculture in Nigeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(4), pages 885-903, Autumn.
    2. Ogechi Adeola & Olaniyi Evans, 2020. "ICT, infrastructure, and tourism development in Africa," Tourism Economics, , vol. 26(1), pages 97-114, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rss:jnljee:v5i2p1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.rassweb.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Danish Khalil (email available below). General contact details of provider: http://www.rassweb.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.