Title:
CAPITAL MARKET OPERATIONS AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL VERIFICATION

Authors:
Dr. Stephen Ebhodaghe Ughulu, Ajayi Monday Osas, Nigeria

Abstract:

This study empirically investigated the relationship between capital market operations and economic growth in Nigeria using secondary data sourced from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) for the period 2000 to 20`18. The main aim of the study was to establish the relationships between economic growth (dependent variable) and the set of independent variables (market capitalization, total value of transactions, and all-shares index). Both statistical and econometric tools were employed to explore these relationships. The statistical tool used in the study included the descriptive statistics and the Pearson correlation matrix, while the econometric tools deployed in the study included the Ordinary Least Squares (OLS, the heteroskedasticity and Ramsey reset tests. The major findings of the study showed that market capitalization and all shares index exerted a positive but insignificant influence on economic growth in Nigeria, while total value of transactions exhibited a positive and significant influence on economic growth. The study therefore concluded that the relevant authorities in Nigeria should as a matter of urgency and deliberate policy transform the country’s capital market as it is generally perceived as the appropriate channel through medium to long term capital is mobilized and on-lent to the investment sector which helps to drive the economy in a unique fashion.