Does Stock Market Development Raise Economic Growth? Evidence from Nigeria

This paper investigates whether stock market development raises economic growthin Nigeria, by employing the error correction approach. The econometric results indicate thatstock market development (market capitalization-GDP ratio) increases economic growth.The recommendations therein include: removal of impediments to stock market developmentwhich include tax, legal, and regulatory barriers; development of the nation’s infrastructureto create an enabling environment for where business can strive; employment of policies thatwill increase the productivity and efficiency of firms as well encourage them to access capitalon the stock market; enhancement of the capacity of the Nigeria Security and ExchangeCommission to facilitate the growth of the stock market, restore the confidence of stockmarket participants and safeguard the interest of shareholders by checking sharp practicesof market operators (particularly speculators).