Title:
STOCK MARKET ENHANCEMENT AND NIGERIAN ECONOMY (1999-2019)

Authors:
Egungwu, Ikenna. (Ph.D) , Nkemakolam, Tony C. (Ph.D) , Mbaeri, C.C and Dr. Okuma N. Camillus (Ph.D)

Abstract:
Stock market plays a prominent role in economic growth of a nation. It serves as a means of raising capital by firms. This work investigated the role of stock market development in economic growth of Nigeria, using a 21 years’ time series data, from 1999-2019. The aim of this research is to determine the extent to which the stock market development has impacted on the economic growth of Nigeria. Looking at the extent to which all share index, Market capitalization and total new issue have impacted on economic of Nigeria. The study employed unit root test to determine the stationarity of the variables, co-integration approach was used to determine the long run relationship of the variables and the significance of the relationship. The study is ex-post facto design where variable are obtained from CBN statistical bulletin and world performance indicators. GDP was used as proxy for economic growth while other explanatory variables are market capitalization, total new issues and all share index. Based on the analysis, it was found that all share index and total new issues have positive but statistically insignificant effect on economic growth while market capitalization has a negative and statistically significant effect on economic growth in Nigeria. The work concluded that since some variables are positive but insignificant or negative and significant effect on economic growth, it is assumed that investors lack confidence in the market and the market is undercapitalized. The researcher, therefore recommend that, policies should be fine-tuned gearing towards solving the problems of unpaid dividends, delay in dividend payment and transfer of stock. Also enabling investable environment and confidence should be created for prospective investors.

Keywords:
Share Index, Economic Growth, Market Capitalization, Total New Issues

DOI:
http://dx.doi.org/10.37500/IJESSR.2021.4216