THE IMPACT OF STOCK MARKET PERFORMANCE ON THE GROWTH OF NIGERIAN ECONOMY

ABSTRACT

This study is motivated primarily by the need to enhance capital accumulation from the stock market, being the long term end of the financial system. This study is an investigation of the impact of Nigeria stock exchange performance on the economic growth of Nigeria. To accomplish these objectives, an econometric methodology was adopted as a tool for testing the stated hypothesis. The ordinary least square was chosen as the estimation tool because of the advantages it has over other estimation technique considering the phenomenon under study.

The result of the student t test revealed that the coefficient for market capitalization, investment rate and real exchange rate are all statistical significant at 5 percent level of significance. But the coefficient of real interest rate were not statistically significant at 5 percent level of significance The R² which is the coefficient of multiple determination also revealed that 99 percent of the variation in the dependent variable is caused by the variation in the explanatory variables. The F test result suggested that the model is statistically significant.

Expansion and efficiency of the Nigerian Stock Market would also be realizable if the recommendations in this project are considered This study recommends that the financial sector should be fully liberalized for efficient functioning of the financial system, the activities of the Nigerian Stock Exchange should be made more transparent as this will bring bout confidence in the mind of investors and people will be encouraged to invest, and the Government should encourage Nigerians to take advantage of the Stock Market and save for investment growth and capital formation in Nigeria.

TABLE OF CONTENT

Title Page .i

Approval Page .ii

Dedication…iii

Acknowledgement iv

Abstract .vvi

Table of Content ..viiviii

CHAPTER ONE

1.1 Background of the study 110

1.2 Statement of the problem1011

1.3 Objectives of the study11

1.4 Hypothesis of the study…11

1.5 Significance of the study.1213

1.6 Scope and limitation of the study13

CHAPTER TWO

LITERATURE REVIEW

2.1 Theoretical literature..1448

2.2 Empirical literature.4856

CHAPTER THREE

METHODOLOGY

3.1 Method of Evaluation..5761

3.2 Model specification..6163

3.3 Data required and source..63

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF RESULT

4.1 ADF Test for stationery6466

4.2 Co integration test..6667

4.3 Presentation of regression result…6768

4.4 Interpretation of regression results6870

4.5 Statistical criteria.7174

4.6 Economic criteria.7478

4.7 Evaluation of hypothesis.78

CHAPTER FIVE

SUMMARY, CONCLUSION AND POLICY RECOMMENDATION

5.1 Summary.7980

5.2 Conclusion.8082

5.3 Policy Recommendation…8283

Bibliography.8490

Appendix..9197