Capital Market and the Performance of the Manufacturing Industries in Nigeria 1970-2012

Abstract

The study examines the role of the capital market in financing the manufacturing sector in Nigeria between 1970- 2012.    Precisely,   the study sought to determine the extent to which the Nigerian capital market contributes to the development of manufacturing industries.  Using secondary data, the ordinary least square method, co-integration test and error correction method; the study reveals that there is a long – term relationship between capital market and the development of the manufacturing firms in Nigeria but the growth in capital market activities did not impact significantly on the manufacturing sector during the period under review.   In fact, the Nigerian manufacturing sector has been on the decline because of non-access to long-term funds from the capital market, high interest rate,   volatile foreign exchange and unstable electricity.  The study recommends that the capital market operators and regulators should encourage local manufacturing firms to list on the exchange by relaxing their conditions, reduce fees, and expand their offerings.  Also, Government should provide necessary infrastructure to support the growth and the development of the manufacturing sector.

Keywords:Capital Market, Financial System, Inclusive Economic Growth, Market Capitalization, Manufacturing Sector Model And Dynamic Regression Analysis