Abstract
This paper addresses the impact of capital market development on economic growth and development since the liberalization policy in 1986 to 2010 in Nigeria. It employs Ordinary Least Square (OLS) and Johansen CO-integration estimation techniques. Gross Domestic Product (GDP) was used as measure for economic growth while the capital market development are represented with Market Capitalization (MCAP), Total Value of Transaction (TVT), Total New Issues (TNI), All-Share Index (ALSI) and Total Listing on the NSE (TLT). The result of the study shows that capital market development has not impacted positively on Nigeria economic growth and development due to the relative small size of the market despite its development as a result of the liberalization policy. Thus, it recommends that policies that would encourage domestic as well as foreign investors to participate in the market should be formulated.
Highlights
The financial system in any economy plays significant role in stimulating economic growth and development
The surplus unit of the economy are majorly individuals and corporate bodies as government rarely supply funds to the market while the deficit units consist only of corporate bodies and government since conventionally, individuals cannot access the capital market for funds (Ewah, Esang and Bassey, 2009). It consists of two arms; the primary market which creates a medium for long-term fresh funds to be raised through the issuance of new financial securities, and, secondary market which provide opportunities for the sale and purchase of existing financial securities that have already been traded in the primary market, among investors thereby encouraging investment in financial securities and boosting economic growth
The Ordinary Least Square (OLS) estimation technique would be employed to assess the short run effects while Johansen co-integrating estimation technique would be employed in order to ascertain the long run effects of the Nigeria capital market indices (Market Capitalization, Total Value of Transaction, Total New Issues, All-Share Index and Total Listing on the Nigerian Stock Exchange (NSE)) on economic growth and development since the introduction of liberalization policy in 1986
Summary
The financial system in any economy plays significant role in stimulating economic growth and development. The surplus unit of the economy (suppliers of funds) are majorly individuals and corporate bodies as government rarely supply funds to the market while the deficit units consist only of corporate bodies and government since conventionally, individuals cannot access the capital market for funds (Ewah, Esang and Bassey, 2009) It consists of two arms; the primary market which creates a medium for long-term fresh funds to be raised through the issuance of new financial securities, and, secondary market which provide opportunities for the sale and purchase of existing financial securities that have already been traded in the primary market, among investors thereby encouraging investment in financial securities and boosting economic growth. Government stocks comprised the bulk of the listing with 19 of such securities quoted on the Exchange in 1966 compared with six at the end of 1961 (Nnanna, Englama and Odoko, 2004)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
