Main Article Content
Abstract
This paper evaluates the contribution of capital market development on economic growth in Nigeria. Annual time series data was generated from 1986 to 2022 and Autoregressive Distributed Lag (ARDL) technique was used for data analysis. Capital market development index (CMD) was constructed to proxy capital market development, GDP growth rate proxied economic growth, while interest rate, technological advancement and government expenditure are control variables. The ARDL F-Bound test result revealed that a long-run relationship exists among the variables. The result further indicates that all variables in the long-run have insignificant negative relationship with growth; while in the short run, a positive and significant impact of capital market development (1.1503) and technological advancement (0.0067) was found on economic growth; interest rate was positive but insignificant; on the other hand, exchange rate (-0.0507) and government expenditure (-1.3280) have significant negative impact on economic growth. The study therefore concludes that capital market development has significant positive impact on growth in Nigeria. To further enhance growth, it is recommended that financial authorities should encourage more private sector participation in the market to raise fund. This increases the capacity of the private sector to expand output which in turn generates employment and consequently, enhances growth in the economy.