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Impact of the Nigerian stock exchange on economic growth

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  • Azubike, Anulika

Abstract

This study examines the impact of the Nigerian stock exchange on economic growth from 1981 to 2011. GDP is the dependent variable, a proxy for economic growth. Market capitalization is a proxy for the Nigerian stock exchange. Other explanatory variables were employed in the model. This study employs the ordinary least square (OLS) methods of estimation, heteroscedasticity and autocorrelation covariance (HAC) in order to avoid spurious regression results. The E-views 6.0 was employed in the regression analysis. In executing this study, the ADF (augumented dickey fuller) test and the Unit Root Test was carried out to test the stationarity of the variables. The result shows that the market capitalization, interest rate, total number of listed securities, number of deals and foreign direct investment satisfy the economic apriori expectation while the total number of issues and the value of deals negates the a priori expectation. The stationarity test shows that all the variables employed are stationary at first difference. The ADF test shows a long-run relationship among the variables in the model of study. Using the t-test, it is revealed that only three (3) variables are significant in the explanation of the dependent variable (GDP) while the remaining four variables are insignificant. Recommendations are made based on the result.

Suggested Citation

  • Azubike, Anulika, 2017. "Impact of the Nigerian stock exchange on economic growth," MPRA Paper 75984, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75984
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    References listed on IDEAS

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    1. Nieuwerburgh, Stijn Van & Buelens, Frans & Cuyvers, Ludo, 2006. "Stock market development and economic growth in Belgium," Explorations in Economic History, Elsevier, vol. 43(1), pages 13-38, January.
    2. Agarwal, Sumit & Mohtadi, Hamid, 2004. "Financial markets and the financing choice of firms: Evidence from developing countries," Global Finance Journal, Elsevier, vol. 15(1), pages 57-70.
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • G1 - Financial Economics - - General Financial Markets
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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