IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 2 2025
DOI: 10.56201/ijbfr.vol.11.no2.2025.pg141.155

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The Link Between Stock Market Performance and Economic Growth: Evidence from Nigeria

Sylvester Aigbogun Ozigbo

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Abstract

The relationship between stock market performance and economic growth has always been a major focus in public discourse. The stock market plays the role of fund mobiliser from the surplus to the deficit sectors of the economy. Such funds have contributed immensely to the growth of major economies around the world. This study is therefore carried out to examine the linkage between stock market performance and the growth of Nigerian economy between 1986 and 2023. The data for the study were sourced from the Central Bank of Nigeria, the Securities and Exchange Commission as well as the Nigerian Stock Exchange Annual Report and Statement of Accounts. The study utilises the ex-post-facto research design technique since the data were already in existence. Cointegration and Error correction model was adopted to analyse the data. The result obtained shows that Gross Fixed Capital Formation, Market Capitalisation, All Share Index and Total Value of Share Traded were all positively related to Gross Domestic Product. However, only GFCF was statistically significant in explaining the changes in GDP. It was therefore recommended that government should reduce all forms of taxes on income receivable from stock market in order to encourage more funds into the market. It was also recommended that government should stop interfering with the operation of the stock market. This will then engender increased portfolio investment from both local and international investors.

keywords:

Market Capitalisation, All Share Index, Value of Share Traded, Gross Fixed Capital Formation and Economic Growth.

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