Capital market impact on economic growth in nigeria

Project Abstract

This research investigates the impact of the capital market on economic growth in Nigeria. The study employs a time series analysis covering the period from 1990 to 2020 to explore the relationship between capital market development indicators and economic growth indicators in the Nigerian context. The primary focus is on how the capital market, as a key component of the financial system, influences the overall economic performance of the country. The research utilizes various econometric techniques to analyze the data, including regression analysis to ascertain the significance of the relationship between capital market development indicators such as market capitalization, trading volume, and economic growth indicators such as GDP growth rate, investment, and employment. The study also considers other relevant factors that may impact economic growth, such as inflation rates, interest rates, and government policies. The findings of the study suggest a positive relationship between capital market development and economic growth in Nigeria. Market capitalization and trading volume in the capital market are found to have a significant impact on GDP growth rate, indicating that a well-functioning capital market can contribute to overall economic expansion. Additionally, the study reveals that increased investment in the capital market is associated with higher levels of employment, highlighting the role of the capital market in creating job opportunities and stimulating economic activity. Furthermore, the research highlights the importance of policy interventions in promoting capital market development to enhance economic growth in Nigeria. Government initiatives aimed at improving market regulations, increasing investor confidence, and fostering transparency are crucial for creating a conducive environment for the capital market to thrive and positively impact the economy. The study emphasizes the need for policymakers to prioritize capital market reforms as part of broader economic development strategies. In conclusion, the research underscores the significance of the capital market in driving economic growth in Nigeria. By providing a platform for mobilizing savings, allocating capital efficiently, and facilitating investment, the capital market plays a vital role in supporting overall economic development. The findings of this study offer valuable insights for policymakers, investors, and other stakeholders seeking to understand the dynamics of the Nigerian economy and enhance its growth prospects through capital market interventions.

Project Overview

<p> </p><p><strong>1.2 STATEMENT OF PROBLEM</strong></p><p>The need to embark on the study is motivated by a number of challenging factors which include the following;</p><p>Decline in the capital market contribution to the real sector of the economy.</p><p>Decline in money supply of the Nigerian economy, arising from decline in capital market contribution to the real sector of the economy.</p><p>Alajekwu and Achugbu (2012) postulated that traditional theorists believed that financial market in general has no correlation with economic growth. This position studies on finding the effect of financial market on growth. Ample of studies have debunked that traditionalist and established association on the above view, the World Bank (2001) acknowledged that economic growth without a well developed domestic financial market would be detrimental to the long run growth prospects of developing countries.Financing the saving investment gap especially in the less developed economy where saving mobilization could not keep pace with the level of investment has necessitated the need for encourage foreign capital inflow in order to bridge the gap and this promote economic growth.The need to develop the Nigerian Capital Market is therefore primary and of necessity in the minds of any forward looking nation and the motivating factor behind the researcher decision to emback on this study which is intended to establish whether the Nigerian Capital Market influences economic goal within Nigeria.</p><p><strong>1.3 OBJECTIVE OF THE STUDY</strong></p><p>The scope of carrying out this research work is to capture the Capital Market Impact on the Economy Growth in Nigeria. To actualize this, the following strategic objectives are formulated by the researcher.<br>To ascertain the level of relationship between Stock Market capitalization and Gross Domestic Product in Nigeria.<br>To determine if All-Share Index affects Money supply of the Nigerian economy</p><p><strong>1.4 RESEARCH QUESTIONS</strong></p><p>1. To what extent dose stock market capitalization affect the gross domestic products in Nigeria?</p><p>2. Would All-Share Index of Nigeria Capital Market impact on Money supply of the Nigerian economy?</p><p><strong>1.5 STATEMENT OF HYPOTHESIS</strong></p><p>1. Ho: There is no significant relationship between Stock Market Capitalization and Gross Domestic Product in Nigeria.</p><p>Hi: There is significant relationship between Stock Market Capitalization and Gross Domestic Product in Nigeria.</p><p>2. Ho: All-Share Index of the Nigeria Capital Market is not significantly related to Money supply of the Nigerian economy.</p><p>Hi: All-Share Index of the Nigeria Capital Market is significantly related to Money supply of the Nigerian economy.</p><p><strong>1.6 SCOPE OF THE STUDY</strong></p><p>In this study, the researcher attempted to capture capital market impact on the economy growth in Nigeria. This is motivated by poor performance of the Nigeria stock exchange, under development of the Nigerian economy etc. the objective of the study is to ascertain the level of relationship between stock market capitalization and gross domestic product in Nigeria. The research work focuses on the Impact of Capital Market on the Nigerian Economy using Market Capitalization, all-share Index and Volume of traded securities as proxies for Capital Market while Goss Domestic Product GDP and Per-Capita Income as proxies for the dependent Variable. The study is anchored on the Secondary Data, specifically Central Bank of Nigeria and Securities and Exchange Commission statistical bulletins from 2009-2014. The study is based in Asaba Metropolis of Delta State of Nigeria.</p><p><strong>1.7 SIGNIFICANCE OF THE STUDY</strong></p> <br><p></p>