Information Asymmetry, Digital Penetration and Market Performance in Nigeria: A 30-Year Empirical Analysis (1996–2025)

This study empirically investigates the effect of information asymmetry and digital penetration on market performance in Nigeria using annual time-series data spanning 1996–2025. Anchored on market efficiency and information economics theory, the study employs descriptive statistics, correlation analysis, and Ordinary Least Squares regression with macroeconomic controls. The empirical results reveal a strong negative relationship between information asymmetry and market performance, confirming that increased information gaps weaken market efficiency, price discovery, and investor confidence. Digital penetration, on the other hand, exerts a positive and statistically significant effect on market performance, demonstrating that digital access enhances information diffusion, trading efficiency, and overall market transparency. The regression further shows that macroeconomic controls—particularly GDP growth and stock market capitalization—significantly condition the digital–market performance nexus. These findings are consistent with Nigerian evidence showing that digital systems and ICT deployment substantially improve market operations and resource allocation efficiency (Eke, 2015; Eke, 2019a). Recent digital economy studies further confirm that advanced digital analytics and platform technologies enhance market predictability and performance through improved information processing (Eke & Obalemo, 2025). From a global perspective, digital financial development has been shown to significantly reduce information frictions and improve market efficiency in emerging economies (World Bank, 2016; UNCTAD, 2021). Overall, the study establishes that reducing information asymmetry through sustained digital penetration is a critical pathway for strengthening market performance in Nigeria. The findings provide robust policy-relevant evidence for deepening digital finance, expanding broadband infrastructure, and strengthening market information systems to enhance long-run market efficiency and performance. Keywords: Information Asymmetry, Digital Penetration, Market Performance, Financial Markets, Nigeria. JEL Classification: D82, O33, G14, G15.