Mobilization of Long-Term Capital for Economic Growth in Nigeria: The Role of the Stock Exchange Market

Abstract

This paper is an empirical discourse on the impact of stock market activities on economic growth in Nigeria. We thus specified and estimated an empirical model utilizing stock market variables in line with economic theory. The results indicate that market capitalization, the total value of traded stocks, and gross capital formation vis-à-vis the stock exchange market are all positive policy variables if the objective is to boost economic growth through investment in the capital market. Indeed, the results revealed that a boom in stock market activities significantly impacts the country’s growth rate. The empirical findings in the study strongly confirm some earlier results of other research that the contribution of the stock exchange market to economic growth is positive. This study also reveals rather troubling empirical findings manifesting as negative point estimates obtained for the total number of listed securities in the market. In line with the empirical findings in this study, we thus recommend amongst other things the need to ease up a bit, the requirements for listing securities in the stock exchange market