Exploring the Nexus between Corruption and all share index of Nigeria Capital Market

International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue XII, December 2021 | ISSN 2454–6186

Exploring the Nexus between Corruption and all share index of Nigeria Capital Market

 Onyekachi Chibueze Onuoha¹*, Nonso John Okoye², Udemadu Frank Chika^3
1Department of Cooperative Economics and Management Nnamdi Azikiwe University, Awka
²Department of Banking and Finance Nnamdi Azikiwe University, Awka
³Department of Cooperative Economics and Management Nnamdi Azikiwe University, Awka
*Corresponding Author

Abstract
The study examined Nigeria corruption perception index and Nigeria transparency index: its effect on all share index of Nigerian capital market. Specifically, the study determined the effect of Nigeria corruption perception index and corruption perception index on Nigeria capital market performance indicator as all-share index. The study is anchored on social disorganization theory which states that behaviour is influenced primarily by one’s environment and that corruption and other deviant and criminal behaviour are a result of the weakened mechanism of social control. The study used descriptive statistics in the analysis and E-view 10 was used. The findings show that there is a significant effect of the Nigeria corruption perception index and Nigeria transparency index on all share index of the Nigerian capital market. This has a wide implication for the capital market in Nigeria as a continued increase in corruption index would adversely affect the all share index. The work recommended that capital market regulators should speedily adopt and enact policies that proactively address fraudulent practices in the Nigerian capital market.

Keywords: Capital market, Corruption, Index, Transparency

Introduction

The capital market provides equity capital and infrastructure development capital that has strong socio-economic benefits through the development of roads, water and sewer systems, housing, energy, telecommunications and public transport. Perkins, Radelet, Lindauer & Block (2012) observed that these projects are ideal for financing through the capital market via long-dated bonds and asset-backed securities. Infrastructure development is a necessary condition for long-term sustainable growth and development. In addition, the capital market increases the efficiency of capital allocation by ensuring that only projects which are deemed profitable and hence successful attract funds. The foregoing will, in turn, improve the competitiveness of domestic industries and enhance the ability of domestic industries to compete globally, given the current momentum towards global integration. The result will be an increase in domestic productivity which may spill over into an increase in exports and economic development (Nwankwo, 2011).
Moreover, the capital market promotes public-private sector partnerships to encourage the participation of the private sector in productive investments (Akingbolunge, 2006). The need to shift economic development from the public to the private sector to enhance economic productivity has become investable as resources continue to diminish. Nwankwo (2011) further pointed out that the capital market assists the public sector to close the resource gap and complement its effort in financing essential socio-economic development, through raising long-term project-based capital. It also attracts foreign portfolio investors who are critical in supplementing the domestic savings levels. It facilitates inflows of foreign financial resources into the domestic economy.

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