The Stock Market; An Imperative for Economic Growth Case Study of Nigeria Stock Exchange

16 Pages Posted: 11 Jun 2019

Date Written: May 26, 2019


This study examined the role of the stock market in Nigeria's economic growth. It aimed at finding out the relationship between stock market activities proxied by market capitalization (MCP), all share index (ASI) and value of new shares (VNS) on Nigeria’s economic growth proxied by GDP. Data were collected from CBN Statistical Bulletin from 1985-2016. The regression analysis, ADF test, Cointegration Error correction model and granger causality were used to analysed the data. The regression analysis shows that ASI has positive but insignificant relationship with GDP. MCP has positive and significant relationship with GDP. VNS has negative and significant relationship with GDP. The ADF result shows that all the variables are stationary in order one. The co-integration result suggests that there were two cointegrating equations while the error correction model indicates a negative sign with F-cal having prob.value of 0.0006 hence there is long run relationship between capital market activities and Nigeria’s GDP. The granger causality test shows that there is no granger causality relationship between GDP and ASI while VNS and MCP have unidirectional causality relationship with GDP. It concluded that the establishment of the stock market is one the best thing that has happened to the Nigerian economy. From the findings, it recommends the need for more reform to be carried out at the market to enhance its activities and financial intermediation functions. Furthermore, information on new shares should be promoted through the mass media to encourage buying by the public.

Keywords: stock market, economic growth, nigeria stock exchange

JEL Classification: G, M

Suggested Citation

oriaregbete, Solomon, The Stock Market; An Imperative for Economic Growth Case Study of Nigeria Stock Exchange (May 26, 2019). Available at SSRN: or

Solomon Oriaregbete (Contact Author)

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics