STOCK MARKET RESILIENCE AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA
Keywords:
All-share Index, Market Capitalization, Trade Volume, Economic Growth, NigeriaAbstract
This study investigated the relationship between stock market resilience and economic growth in Nigeria from 1981 to 2023. Using time series data sourced from the Central Bank of Nigeria bulletin, 2023. Specifically, the All-Share Index, Market Capitalization and Trade Volume were used to proxy stock market resilience, while Real Gross Domestic Product (RGDP) was used to measure Economic Growth in Nigeria. The Augmented Dickey-Fuller test found that the All-Share Index, trade volume, and RGDP were stationary at first difference 1(1), while market capitalization was stationary at level 1(0). The ARDL bound test revealed a long-run association between stock market resilience and economic growth. Key findings include a positive but insignificant relationship between the All-Share Index and economic growth, a negative and insignificant relationship between market capitalization and economic growth, and a positive relationship between trade volume and economic growth. The study recommends that monetary authorities should formulate policies to sustain stock market share prices and attract foreign investment, enhance market capitalization to reverse its negative effect, and introduce innovative financial instruments to increase market participation and trading volumes.
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