Impact of Capital Market Instruments on Firm Development in Nigeria

Abstract

This study probed the impingement of capital market instruments on firm’s development in Nigeria. The objectives of the study were to determine the effect of market capitalization on firm’s profitability, value of securities traded in the markets on firm’s total capital employed and all share indexes on firm’s total assets. The study adopted ex-post facto research design. An annual time series was collected from Central Bank of Nigeria (CBN) statistical Bulletin (2020) and Annual report of Unilever Nig. Plc for a period of fifteen (15) years ranging from 2006 – 2020. The hypotheses set out to for this work were examined and analyzed, using simple linear regression through E-views 9. The findings of the study revealed that market capitalization (0.128965) has a positive relationship with firm’s profitability, value of traded securities (1.173329) has a positive relationship with total capital employed and all share indexes (0.106388) has a positive relationship with firm’s total assets. The test of hypotheses revealed that market capitalization (p=0.0033<0.05) is statistically significant with firm’s profitability, value of traded securities (p=0.0935>0.05) is statistically insignificant with firm’s total capital assets and all share index (p=0.0169>0.05) is statistically insignificant with firm’s total assets. Following from the results of the analysis, it was recommended that a more vibrant Security and Exchange Commission (SEC) should be put in place with a view of ensuring a stronger regulatory and supervisory capacities activities in the capital market