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Economic Growth Arguments: The Role of the Capital Market

Received: 24 December 2016     Accepted: 4 January 2017     Published: 14 April 2017
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Abstract

The study has examined critically the vital role capital market can play at improving economic growth. The total market capitalization and all share index were used as proxies for the independent variables while gross domestic product was used as proxy for economic growth, serving as dependent variable. The study considered the activities at the capital market as having value chain consequences that encapsulate the wheel of growth of the economy. As such, to test the validity the OLS regression analysis technique was adopted for empirical analysis. The result indicates a statistically significant relationship with total market capitalization while all share index showed a statistically insignificant relationship. In all, more instruments were recommended to be introduced in the market if the capital market would fully perform its function as lubricating channel of economic growth.

Published in International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 3)
DOI 10.11648/j.ijefm.20170503.12
Page(s) 139-145
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Capitalization, All Share Index, Securities, Instruments, GDP

References
[1] Asaolu, T. O. and Ogunmuyiwa, M. S. (2010) “An Econometric Analysis of the Impact of Macroeconomic Variables on Stock Market Movement in Nigeria”. Asian Journal of Business Management, Vol 3. No.1, pp 72-78.
[2] Binos, Y. (2001) “Promoting Purposeful Economic Development in States and Local Government Council through Capital Market”. House of Assembly Chambers, (June 2001). Pp 7–9.
[3] CBN (2007) “Capital Market Dynamics in Nigeria: Structure, Transaction Costs and Efficiency 1980 – 2006”. Real Sector and Financial Analysis Sector Division, Research and Statistics Department.
[4] CBN (2009) Economic Report for the third quarter of 2009.
[5] CBN (2010) Economic Report for the third quarter of 2010.
[6] Ezirim, B. C. Adebajo, A. Elike, U and Muoghalu, M. I (2009) “Capital Market Growth and Information Technology: Empirical Evidence from Nigeria”, International Journal of Business Economics Perspective, Vol.4, No1.
[7] Ogunbiyi, S. S. and Okunlola, F. A. (2013a): “Financial Intermediation and Economic Growth: The Nigerian Experience (1980-2010)” Journal of Management Sciences, June. 2013. Vol. 1, No. 1, p 99-109.
[8] Ogunbiyi, S. S and Okunlola, F. A (2015b): “External Debt and the Capital Accumulation of Nigeria: A Cointegration Approach (1980-2012)”. Research Journal of Finance and Accounting, Vol. 6, No.11.
[9] Okonjo – Iweala, (2011): Okonjo-Iweala Frets over Rising Domestic Liabilities, The Nation NewsPaper, August 21st, 2011.
[10] Okunlola, F. A., Dangor, B. and Gbanador, M. (2013). “Dividend Policy and Market Price of Shares: Evidence: Evidence from the Nigerian Stock Exchange.” Journal of Business and Economic Research, Vol 8. No1, p 125–134, 2013.
[11] Oluwatoyin, M and Gbadebo, O. O. (2009) “The impact of share market capitalization on performance: A case study in the Nigeria confectionary industry”, African Journal of Business Management, Vol. 3 (5), pp 220-226.
[12] Onyeiwu, C. (2012): “Domestic Debt and the Growth of Nigerian Economy”, Research Journal of Finance and Accounting”, Vol. 3, No. 5.
[13] Osaze, E. B. (2007) Capital Markets - African and Global, History, Systems, Practices, Operations, Procedures and Investment Techniques. Lagos: Book House.
[14] Riman, H. B. and Eyo, E. (2008) “Stock Market Performance and Economic Growth in Nigeria; A Causality Investigation”. Global Journal of Social Sciences, Vol 7, No. 2, pp 85–91.
[15] Ndi-Okere, O. (2006) “A Review of the Performance of the Nigerian Stock Exchange in 2006”. Sourced from www.nigerianstockexchange.org.
[16] NSMA (2002) “Investment Opportunities and Challenges in the Nigerian Capital Market”. Nigerian Stock Market Annual, April 2002.
[17] Okpara, G. C. (2010) “Stock Market Prices and the Random Walk Hypothesis: Further Evidence from Nigeria”. Journal of Economics and International Finance, Vol. 2, No. 3 pp 049-057.
Cite This Article
  • APA Style

    Oke J. A., Okunlola F. A., Suberu O. J. (2017). Economic Growth Arguments: The Role of the Capital Market. International Journal of Economics, Finance and Management Sciences, 5(3), 139-145. https://doi.org/10.11648/j.ijefm.20170503.12

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    ACS Style

    Oke J. A.; Okunlola F. A.; Suberu O. J. Economic Growth Arguments: The Role of the Capital Market. Int. J. Econ. Finance Manag. Sci. 2017, 5(3), 139-145. doi: 10.11648/j.ijefm.20170503.12

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    AMA Style

    Oke J. A., Okunlola F. A., Suberu O. J. Economic Growth Arguments: The Role of the Capital Market. Int J Econ Finance Manag Sci. 2017;5(3):139-145. doi: 10.11648/j.ijefm.20170503.12

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  • @article{10.11648/j.ijefm.20170503.12,
      author = {Oke J. A. and Okunlola F. A. and Suberu O. J.},
      title = {Economic Growth Arguments: The Role of the Capital Market},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {5},
      number = {3},
      pages = {139-145},
      doi = {10.11648/j.ijefm.20170503.12},
      url = {https://doi.org/10.11648/j.ijefm.20170503.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170503.12},
      abstract = {The study has examined critically the vital role capital market can play at improving economic growth. The total market capitalization and all share index were used as proxies for the independent variables while gross domestic product was used as proxy for economic growth, serving as dependent variable. The study considered the activities at the capital market as having value chain consequences that encapsulate the wheel of growth of the economy. As such, to test the validity the OLS regression analysis technique was adopted for empirical analysis. The result indicates a statistically significant relationship with total market capitalization while all share index showed a statistically insignificant relationship. In all, more instruments were recommended to be introduced in the market if the capital market would fully perform its function as lubricating channel of economic growth.},
     year = {2017}
    }
    

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    AU  - Oke J. A.
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    AB  - The study has examined critically the vital role capital market can play at improving economic growth. The total market capitalization and all share index were used as proxies for the independent variables while gross domestic product was used as proxy for economic growth, serving as dependent variable. The study considered the activities at the capital market as having value chain consequences that encapsulate the wheel of growth of the economy. As such, to test the validity the OLS regression analysis technique was adopted for empirical analysis. The result indicates a statistically significant relationship with total market capitalization while all share index showed a statistically insignificant relationship. In all, more instruments were recommended to be introduced in the market if the capital market would fully perform its function as lubricating channel of economic growth.
    VL  - 5
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Author Information
  • Department of Banking and Finance, Faculty of Financial Management Studies, The Polytechnic Ibadan, University Of Ibadan, Ibadan, Nigeria

  • Department of Banking and Finance, Faculty of Financial Management Studies, The Polytechnic Ibadan, University Of Ibadan, Ibadan, Nigeria

  • Department of Banking and Finance, Faculty of Financial Management Studies, The Polytechnic Ibadan, University Of Ibadan, Ibadan, Nigeria

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