Analysis and responses of Stock and Capital market on Nigerian Economic growth: Structural Vector Autoregressive (SVAR) model

The stock market development is an important part of the economy of any country. It plays a crucial role in the growth of the industry as well as commerce that ultimately affects the economy of a particular nation to a great extent. The study examines the responses of Stock and Capital market on Nigerian Economic growth using quartly data from 2000Q1 to 2021Q4. The Zivot-Andrew unit root test indicates that real gross domestic product and all share index are integrated of order one while market capitalization, stock value traded and private investment are integrated of order zero. The study employed Structural VAR model, the results from the impulse response functions revealed that, market capitalization, all share index and stock value traded transmit positive shocks to real growth domestic product in Nigeria while Private investment transmits negative shocks to real growth domestic product in Nigeria. Therefore, the study concludes that stock and capital market transmit positive shock to economic growth in Nigeria. The study recommends that the regulatory agencies in the capital market should be focused on enhancing the efficiency and transparency of the market in order to improve investors’ confidence. Government should be an efficient of macroeconomic variables in order to strengthen the performance of capital market so as to achieved economic growth.