IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 9 NO. 2 2024
DOI: https://doi.org/10.56201/ijefm.v9.no2.2024.pg46.72

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Governance and All Share Index in the Nigerian Capital Market

M.O. Ndugbu K.C. Otiwu Nwaguru, Wisdom Ezemndi

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Abstract

This study investigated the nexus between governance and All Share Index of the Nigerian capital market for the period 1991-2021. The objectives of the study were to determine the extent to which regulatory quality, rule of law and control of corruption have affected the All Share Index of the Nigerian capital market. Data on these variables were collected from Central Bank of Nigeria statistical bulletin and the World Bank. These collected data were subjected to descriptive analysis, unit root test, Johansen co-integration analysis, Wald test, granger causality test and series of diagnostic tests. Majorly, it was revealed that there is no co- integration between governance and All Share Index; there is no directional causality between the variables; regulatory quality has a positive insignificant effect on All Share Index while rule of law and control of corruption have negative insignificant effects on All Share Index in Nigeria. It was concluded that there is no significant nexus between governance and All Share Index of the Nigerian capital market, which underlines the underdeveloped nature of the Nigeria capital market which is tied to so many factors and governance is one of them. On this backdrop, the study recommended that there should be a synergy between governments at all levels in order to help enthrone proper governance in Nigeria and to dethrone nepotism, favoritism and corruption, which are the hallmark of the Nigerian system. Also, as a way to further enhance governance quality and encourage investment in the Nigerian capital market, there is need for the Nigerian government to promote political stability and security as one of its core mandates.

keywords:

Governance, All Share Index, Regulatory Quality, Rule of Law, Control of Corruption and Wald Test.

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