Impact of Capital Market Development on Economic Growth in Nigeria
- July 29, 2021
- Posted by: rsispostadmin
- Categories: Banking and Finance, IJRISS, Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VI, June 2021 | ISSN 2454–6186
Impact of Capital Market Development on Economic Growth in Nigeria
Samuel Obafemi Dada
Department of Finance, Faculty of Management Sciences,
Ekiti State University, Ado-Ekiti, Ekiti State, Nigeria.
Abstract: – This study appraised the impact of capital market development on economic growth in Nigeria between 1990 and 2015. The study used Gross Domestic Product as the dependent variable and also used foreign direct investment, government expenditure, market capitalization, all share index, number of transactions, credit to private sector and stock turnover ratio as independent variables coupled with the use of the Auto Regressive Distributed Lag (ARDL) model and Granger Causality technique revealing that capital market development has positive effect on economic growth. Hence, it is recommended that participation within the market should be encouraged as various entities within the economy should be encouraged to invest in the capital market through various incentives in a bid to spur economic growth
Keywords: Capital Market, All Share Index, Market Capitalization,
I.INTRODUCTION
The role of the financial system in propelling economic growth cannot be over stressed in literature (Abu, 2009). The financial system embraces the financial institutions such as the central bank, discount houses, deposit money banks, money market, capital market and the interplay of their activities. In the process of intermediation, credit is made available for various purposes within the system in a bid to foster economic growth and development. Correspondingly, Schumpeter (1911) opined that a proper financial system can significantly contribute to economic growth.
However, the need for the interplay within the financial market vis-à-vis economic growth has been hotly contested in literature as various schools of thought have evolved over time to debate over the benefit of the financial market in the economic environment. Schumpeter (1911), Bagehort (1873) and Hicks (1969) averred that the financial market contribute
