THE CAPITAL MARKET AND ECONOMIC GROWTH IN NIGERIA

Abstract

In many economies, the capital markets play a vital role as one of the most powerful drivers of economic growth and wealth creation. This study assessed the impact of the capital market on economic growth in Nigeria spanning the period of 1986-2021. The study used the Autoregressive Distributed Lag (ARDL) model to carry out its empirical analysis. The study’s empirical findings showed that Nigeria’s capital market positively and significantly contributed to the growth of the Nigerian economy. It found that market capitalization which is the widely used indicator in assessing the size of a capital market had a significant positive impact economic growth both in the short and the long-run run. Consequently, to improve the performance of the capital market, the study recommends that the Securities and Exchange Commission should increase the level of coordination among the capital market regulators so as to ensure efficiency in its operations, raise small investors' understanding of risk and financial literacy, make sure that long-term term credit is accessible, and, ensure that only legitimate businesses are gaining access to the capital market, among others.