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EFFECT OF CAPITAL MARKET ON THE DEVELOPMENT OF NIGERIA ECONOMY (1990-2015)

Abstract

The study investigated the impact of the capital market on growth of Nigerian economy. The study used a 26-years  time series data.(1990-2015) to regress GDP(dependent vari- able) on capital market development indicators: market cap- italization ratio (MACR), turnover ratio (TUOR), total value of Shares traded (TVSR) total new issues (TNISS), total listed Equities and Government stock (TLEGS) and financial deep- ening (FDEEF). The Ordinary least squares (OLS) multiple regression estimation techniques were adopted in the analysis. The study has shown that, capital market development vari- ables, significantly affect economic growth of Nigeria. This implies that the operations of the Nigerian capital market have had significant impact on the Nigerian economy. The study recommended that more listings as well as foreign investors’ participation should further be encouraged in order to improve market capitalization. In addition, the regulatory authorities should ensure transparency, fair trading transactions and deal- ings in the market to restore confidence, among others.