The Effect of Stock Market on Economic Growth In Nigeria

Abstract

This study examines the effect of stock market on economic growth in Nigeria.Ordinary least squares regression (OLS) was employed using the data from 1989 to 2008. The results indicated that there is a positive relationship between economic growth and all the stock market development variables used. With 99 percent R-squared and 98 percent adjusted R-squared, the result showed that economic growth in Nigeria is adequately explained by the model for the period between 1989 and 2008. By implications 98 percent of the variation in the growth of economic activities is explained by the independent variables. The study affirmed positive links between the stock market and economic growth; and suggests the pursuit of policies geared towards rapid development of the stock market.

Keywords: Growth, market, stock, economic