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Social and Economic Drivers of Stock Market Performance in Nigeria

Ismaila Akanni Yusuf, Mohammed Bashir Salaudeen and Hope Agbonrofo

MPRA Paper from University Library of Munich, Germany

Abstract: The study examines the effect of the social and economic indicators on the stock market performance in Nigeria between 1981 and 2019. The study employs secondary data from the World Bank and Central Bank of Nigeria using the ordinary least squares as the technique of estimation. Findings show that regarding the economic drivers, interest rate, exchange rate, and inflation rate negatively impact the stock market while only income exerts a positive impact. However, both income and interest rate are significant economic drivers of stock performance. Regarding social drivers, life expectancy, poverty, and population exert a positive impact on stock performance. Similarly, both life expectancy and population are significant social drivers of stock market performance in Nigeria. The study recommends that monetary authorities should be cautious in avoiding discretionary policies that might hike the exchange rate; otherwise, the flow of funds to the stock market will be derailed. Also, the fiscal authority should invest massively in safety nets programmes to enhance the capacity of the growing population and reduce poverty.

Keywords: Economic Drivers; Social Drivers; Stock Market; Nigeria. (search for similar items in EconPapers)
JEL-codes: C1 E5 G1 G12 (search for similar items in EconPapers)
Date: 2021-10-10
New Economics Papers: this item is included in nep-cwa, nep-fdg and nep-mac
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Published in Journal of Economic Impact 3.3(2021): pp. 137-143

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