Effect of stock market performance on industrial productivity of Nigeria: An empirical analysis

Abstract

This study investigated the effect of stock market performance on industrial productivity in Nigeria from 1985 to 2016. In particular, the study examined Nigerian stock market performance indices such as market capitalization, all share index, value of shares traded and number of deals to ascertain how they affect industrial sector contribution to Gross domestic product. The study used unit root test, Johansen co-integration test and vector error correction mechanism to carry out its tests and analysis. The unit root test results revealed that the variables used in the study were integrated at their first differences, while the Johansen co-integration test results suggested a long run relationship between industrial sector productivity and stock market performance indicators. It was also discovered that market capitalization though negative led industrial productivity in Nigeria. Hence, the study recommends policies aimed at accelerating the stock market development and efficiency in order to engender industrial productivity of Nigeria in the years to come.