Investigation of the Connection between Stock Market Development and Economic Growth in Nigeria (1999-2023)

Iheanyichukwu Emmanuel Nkwa, Joachin Chetachi Uchegbulam, Oluwatomisin Peter Ajayi, Glory Mmerechi Triumph Okereke, Ishaku Solomon Kachalla and Margaret Tikuechukwu Ezennaya
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Iheanyichukwu Emmanuel Nkwa: Department of Business Administration, Faculty of Management Science, Federal University Otuoke Bayelsa, Nigeria.
Joachin Chetachi Uchegbulam: Department of Economics, Faculty of Social Science, University of Nigeria Nsukka, Nigeria.
Oluwatomisin Peter Ajayi: Department of Economics, Faculty of Social Science, University of Nigeria Nsukka, Nigeria.
Glory Mmerechi Triumph Okereke: Department of Politics and International Relations, Faculty of International Relations, Florida International University, United States of America.
Ishaku Solomon Kachalla: Department of Business Administration, Salem University Lokoja, Nigeria.
Margaret Tikuechukwu Ezennaya: Department of Business Administration, Faculty of Management Sciences, Ajayi Crowther University, Nigeria.

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Abstract: This paper analyses the dependence of the development of the stock market on economic growth in Nigeria with the help of pooled data during the period between 1999 and 2023. The results demonstrate significant, positive relationship between the market capitalization and the economic growth whereas the volume of transaction and value of transaction have insignificant negative relationship with the economic growth. The study confirms that there is long run relationship between the market capitalization, volume of transaction and market development. It also indicates unidirectional causal correlation with economic growth influencing market capitalization and volume of transaction. The findings confirm the opinion that stock market development is instrumental when it comes to economic development in Nigeria. The research proposes policy measures to spur productivity, enhance savings and investor confidence and the process of dealing in the market capitalization to entice the participation of foreign investors. The results are useful additions to what already exists in literature on the dependence between stock market evolution and the economic growth, which could be of use to policymakers and the other interested parties in the Nigerian economy.

Date: 2025-10-08
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Published in Journal of Global Economics, Management and Business Research, 2025, 17 (3), pp.285-295

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05307294

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