STOCK MARKET DEVELOPMENT AND ITS INFLUENCE ON ECONOMIC GROWTH IN NIGERIA

This study examined the impact of the Nigerian Stock market development on the nation’s economic growth from 1985 to 2014. The economic growth was proxy by the GDP while the stock market variables considered included; market capitalization and market turnover ratio as proxy for stock market development in terms of size and liquidity. The study utilizes the Johansson’s co integration test in establishing if a long run relationship does exist between stock market development and economic growth in Nigeria. The empirical results suggest that the stock market is significant in determining economic growth in Nigeria using the error correlation model and it was found that the stock market has impacted insignificantly on the economic growth. It is recommended that policy makers should ensure improvement in the market capitalization, by encouraging foreign direct investment participation in the market. Small and medium entrepreneurs should be encouraged to access the market for investible funds given their close affinity with the grass root funds mobilization ability.