Empirical Investigation of the Effect of Treasury Bill Subscriptions on Stock Market Growth in Nigeria

Bunu; Kimise-ebi

doi:10.56201/ijbfr.vol.12.no9.2026.pg134.154

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Empirical Investigation of the Effect of Treasury Bill Subscriptions on Stock Market Growth in Nigeria

Bunu, Kimise-ebi

Abstract

The study investigated the effect of treasury bills subscriptions on stock market growth in Nigeria using annual time series data spanning several decades. It examined how Central Bank, commercial bank, non-bank, and total treasury bills subscriptions influenced stock market capitalisation as a measure of market growth. Secondary data were obtained from the Central Bank of Nigeria Statistical Bulletin and analysed using descriptive statistics, correlation tests, unit root tests, Johansen cointegration tests, and the Vector Error Correction Model. The descriptive results showed wide fluctuations in both treasury bill activity and stock market performance over the years. The cointegration results confirmed the presence of a long- run equilibrium relationship among the variables. The Vector Error Correction Model indicated that Central Bank, commercial bank, and non-bank subscriptions had insignificant effects on stock market capitalisation, although their coefficients revealed both positive and negative short-run movements. However, total treasury bills subscriptions exerted a positive and significant effect, which showed that aggregate participation in the treasury bills market supported stock market performance. The error correction term was negative and significant, which confirmed that the system adjusted to long-run equilibrium at a moderate speed. The study concluded that treasury bills subscriptions contributed to stock market growth only when examined in totality rather than by individual investor categories. It recommended that policymakers promote broad participation in treasury bills while ensuring balanced interactions between the money market and the capital market to enhance financial system stability and support long-term market development.

References

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Empirical Investigation of the Effect of Treasury Bill Subscriptions on Stock Market Growth in Nigeria

Abstract

References

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