Stock Market Development and Economic Growth in Nigeria: A Camaraderie Reconnaissance

Abstract

This study on camaraderie reconnaissance explored the long run relationship between stock market development and economic growth in Nigeria from 1981 to 2015. Market capitalization ratio and turnover ratio were used to measure the depth of development of Nigeria’s stock market, whereas growth rate of real gross domestic product facets economic growth. Secondary data were sourced from Nigerian Stock Exchange (NSE) and National Bureau of Statistics (NBS) were analysed using Autoregressive Distributive Lag (ARDL) model. From the analysis performed, the depth of development in Nigeria’s stock market has positive but insignificant relationship with economic growth both in short and long run. The granger causality analysis dispelled the adeptness of Nigeria stock market to propel growth. Stock market is growth inducing but in the context of Nigeria, economic growth is independent of stock market operation. The government need to steadfastly tackle inhibiting factors such as infrastructural inadequacy, weak institutional and regulatory framework encumbering the stock market from realization of its objective of capital mobilization for economic growth.