STOCK MARKET DEVELOPMENT AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS
Keywords:Stock market development, economic growth, granger causality, Nigeria
This study adopts Augmented Dickey-fuller techniques to investigates the relationship
between stock market development and economic growth, using annual time series data
for Nigeria over the period 1986 to 2017, vis-à-vis econometric techniques such as unit
root test, cointegration test and Granger causality test. The results show that there is a
long-run relationship among variables used in this study. These ndings also lead to
acceptance of the hypothesis that stock market- Led economic growth. Furthermore, the
results obtained from Granger causality test show that causality runs from stock market to
economic growth. Moreover, the result reveals evidence of uni-directional relationship.
The following policy measures are suggested among others that Nigeria should remove
impediments to stock market development such as tax, legal and regulatory barriers. In
addition there should be sustained effort to stimulate productivity in both the public and
private sectors. This will leads to improve investment and stimulate growth.