An Empirical Analysis of the Impact of Capital Market Activities on the Nigerian Economy

Abstract

This study examined empirically the impact of capital market activities on the Nigerian economy within the period 1990 – 2006. The study was carried out to show the relevance of capital market in the economic development of the country. The Ordinary Least Square (OLS) techniques was utilized to empirically assess the impact of our modeled independent variables/regressors on our chosen dependent variables. The hypothesis that the Nigerian Capital Market has a significant impact on GDP was tested and validated with the results. Our findings gave rise to statistically significant t-statistics which further confirms the effect of the independent variables on the dependent variables. Some of the recommendations to further accelerate economic growth in Nigeria, are more efforts at formulating and implementing favourable investment friendly policies. Others include the expansion of the stock market in terms of depth and breadth and the attraction of foreign direct investment and foreign portfolio investment into the Nigerian economic landscape.

Keywords: Nigeria, Market Capitalization, New issues, Trading Values, Gross Domestic Product.