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. 2 NO. 1 2017

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Impact of Stock Market Liquidity and Efficiency on Performance of the Manufacturing Sector in Nigeria (1985-2014).

Florence O. Ariwa, Ogechi I. Ani, Kingsley O. Onyele, Idika J. Ekeleme & Odili Okwuchukwu (Ph.D)

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Abstract

The paper investigated the impact of stock market liquidity and efficiency on performance of the manufacturing sector in Nigeria using time series data from 1985-2014. In the course of data analysis, the study employed unit root test and ARDL bounds test approach to co-integration. The unit root test results showed that capacity utilization from the manufacturing sector, stock market efficiency and turnover ratio were integrated at order zero, while other variables were integrated at order one. The ARDL bounds test result revealed that the variables in the specified model were bound together in the long-run. The associated equilibrium correction was also significant attesting to the existence of long-run relationship. The findings also indicated that stock market efficiency and number deals were significant variables that explained the changes in the Nigerian manufacturing sector. Therefore, an efficient market must be large and liquid. As such, accessibility and cost information must be widely available and released to investors at more or less the same time.

keywords:

Stock market efficiency, stock market liquidity, turnover ratio and manufacturing sector capacity utilization

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