The impact of capital market on the economic growth of Nigeria

Abstract

The study assessed how the capital market affected Nigeria's economic expansion. Specifically, the impact of the Nigeria stock exchange's total value of transactions (TVTs), all-shares index (ASIs) and stock market capitalisation (MCAP) on Nigeria's economic development was evaluated. Time-series data covering 1986–2021 was obtained in the study. Estimation methods used in the study’s analysis include descriptive statistics correlation analysis, ARDL co-integration analysis, parsimonious error correction model, variance decomposition and other post-estimation tests. Discoveries from the study showed that MCAP positively impacts economic growth in the long and short run. The ASI affects economic growth positively and insignificantly in the long and short runs, and the TVTs exerts a significant positive effect on the economic growth of Nigeria. Hence, the study suggested that the Security and Exchange Commission should explore measures, including technological integration in trading activities, to deepen development in the capital market.

Keywords: All-share index, gross fixed capital formation, market capitalisation, real gross domestic product, total value of transactions;