Macroeconomic determinants of bond market development: Evidence from Nigerian
Abstract
This paper examined the macroeconomic determinants of bond market development in Nigeria to address the persistent research question of whether bond market development is driven by macroeconomic factors or institutional factors in emerging markets. Time series data generated over the period of 32 years were analyzed using ordinary least square regression techniques involving multiple regression. The aggregate bond market capitalization comprising both government bonds and corporate bonds were exploited. The major findings of the study revealed that exchange rate, interest rate, inflation rate and banking sector development have negative and significant influence on the Nigerian bond market capitalization and as such, they demonstrated strong evidence as robust macroeconomic determinants and drivers of bond market development in Nigeria.
Keywords: Bond market, Macroeconomics, Development, Financial market, Capital market
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