Capital Market as a Barometer for Development: Its Impact and Contribution to Nigerian Economy 1991-2011

Abstract

This focuses on the influence of Nigerian capital market in economic development of Nigerian. One hypothesis was formulated to guide the study. The dependent variable in this hypothesis was economic development measure by gross domestic product (GPD) while the independent variables include: market capitalization (MKTCAP), total new issues (TNI), number of listed securities (NLS), number of quoted companies (NQC), value of transaction (VT), and turnover Ratios TR. The ordinary least square (OLS) technique was employed to estimate co-efficient of the variables of the multiple regression models based on the time series data collected from the Nigerian stock Exchange, Securities and Exchange Commission, Central Bank of Nigeria and federal office of statistics. The findings reveal a significantly relationship between dependent variable (economic development) and independent variables such as, total new issues and number of quoted companies, whereas market capitalization number of listed securities, value of transactions and turnover ratios showed wrong signs. It was therefore recommended that government should put more effort in developing active issues and motivating local and foreign companies and individual investors to patronize the market by way of raising funds for investment and productive purposes.