Capital market and agricultural sector output in Nigeria

Abstract

This study centres on capital market and agricultural sector output in Nigeria. The main objective is to examine the effect of capital market on agricultural sector output in Nigeria. The specific objectives are to find out the effect of market capitalization, value of transactions and share index on agricultural sector output in Nigeria. The data were obtained from Central Bank of Nigeria Statistical Bulletin for the period 1987 to 2019. The Autoregressive Distributive Lag approach that is suitable for data with mixed order of integration was employed to regress the capital market variables on agricultural sector output which is the dependent variable The empirical analyses revealed that market capitalization and share index had a positive effect on Agricultural sector output while value of transaction had negative effect on agricultural sector output in Nigeria. This study shows that capital market has only short run effect on Agricultural sector output in Nigeria. The study concludes that Nigeria capital market may not have invested significantly in the agricultural sector. The capital market is expected to boost long run growth of various sectors where adequate investments are made. The study recommends that government through the Central Bank of Nigeria should introduce and implement financial policies (monetary policies) that will make the capital market more efficient. The cost of doing business in the capital market should be reduced so as to make it profitable.