Vol: 3, Issue: 2 2013

Page: 73-82

Stock Market Operations in a Developing Economy: Empirical Evidence from the Nigeria Experience

Akingbade Banjo Peter

The stock market is a common feature of a modern economy and is reputed to perform necessary functions which are expected to impact positively on the economy of Nigeria. The paper examined the impact of stock market on Nigerian economic growth. Data on Stock market from 1985 to 2008 were analyzed using least square regression equation. The economic growth was proxied by the gross domestic product (GDP) while the stock market variables considered included market capitalization, total listed equities and government stock, total new issues and 'value of transactions. The result indicated that economy responds favourably to measures taken to increase total listing of equity and government stock in the Nigerian stock exchange (TNSE). The TNSE wasstatistically significant at 5% level perhaps due to recent moves to encourage listing in the market. The market capitalization of equities and debt (MCED) and value of the transactions of government and industrial securities (TGlS) exhibit positive relationships with GDP but have not made significant impact on economic growth in Nigeria. Policies geared towards rapid development of the stock market and measures to step up investors' confidence and activities in the market are strongly encouraged so that it could contribute significantly to the Nigerian economy.