Econometric Analysis of the Role of Stock Market on Economic Growth in Nigeria (1980 – 2014)

Chekube Philip Uzoka


The research study examined the role of stock market on economic growth of Nigeria from the period of 1980-2014. This means that the performance of the stock market is an impetus for economic growth and development. The economic growth was proxied by Gross Domestic Product (GDP) while the stock market variables considered include; Market Capitalization Ratio (MCR), Value Traded Ratio (VTR) and Turn-Over Ratio (TOR). Applying Johansen co-integration, results show that the Nigerian stock market and economic growth are co-integrated. This implies that a long run relationship exists between stock market and economic growth in Nigeria as a result of the F-statistics in Ordinary Least Square (OLS) regression analysis which is significant at 5 percent using a two-tailed test. This is a clear indication of the relative positive role the stock market plays on the economic growth of the country. The evidence from this study reveals that the activities in the stock market tend to impact positively on the economy. Among other recommendations, the study therefore suggests that the government should remove impediments to stock market development in the form of tax, legal and regulatory barriers because they are sometimes disincentives to investment.

Keywords: Stock Market, Nigeria and Economic Growth


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ISSN (Paper)2222-1700 ISSN (Online)2222-2855

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