Capital market capitalization and economic growth in Nigeria: an econometrics analysis

Abstract

There is no doubt that capital market capitalization plays an essential role in economic growth of any nation and increasing access to a developed capital market is essential to unlocking rapid economic growth in Nigeria. Consequently, this paper has empirically examined the nexus between capital market capitalization and economic growth in Nigeria using annual time series data for the period 1990-2021. By applying Augmented Dickey Fuller, OLS, co-integration and causality tests the results indicate that there is a positive and significant relationship between capital market capitalization and economic growth, there is a long-run relationship between the variables and also unidirectional causality was found from MCAP to GDPG. Subsequently, the paper recommends that policy makers should concentrate on implementing short-term and long-term policies that will develop the Nigerian financial system especially the capital market since it is capable of boosting economic growth in Nigeria.