IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 4 2025
DOI: 10.56201/jafm.vol.11.no4.2025.pg11.20

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Stock Market Liquidity and Nigerian Economy

Council Francis & Prof Ayunku Ego Peter

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Abstract

The study investigates the impact of stock market liquidity on agricultural sector economy in Nigeria; for the period 1995-2024. The ex-post facto research design was adopted. Secondary data are used and collects from the Central Bank of Nigeria Statistical Bulletin, 2024. The study uses agricultural sector output as proxy for agricultural sector economy and use as the dependent variable; whereas, Value Trade, All Share Index and Market Capitalization are use as independent variables to measure stock market. Hypotheses are formulated and tested using time series econometric techniques. The study reveals a positive significant impact of market capitalization on agricultural sector output in Nigeria. All-Share-Index has a positive significant impact of agricultural sector output in Nigeria. There is a positive significant effect of value trade on agricultural sector output in Nigeria. There is a long-run equilibrium effect of stock market on agricultural sector performance in Nigeria; and, the result confirms that about 68% short-run adjustment speed from long-run disequilibrium. The coefficient of determination indicates that about 63% of the variations in agricultural sector economy can be explained by changes in stock market variables (MCP, ASI and VTD) in Nigeria. The study concludes that stock market liquidity has a negative significant impact on agricultural sector performance in Nigeria. The study recommends that the regulatory authority should find a means of relaxing some of the requirements to accommodate other investors. Sensitization programmes should be put in place in educating the investors in the agricultural sector of the economy; which will enable them to the activities of the stock market. Government and the stake holders should have a good working relationship in order to ensure effective development in Nigeria.

keywords:

Stock Market, Liquidity, Agricultural Sector, Economy, Nigeria.

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