Stock Market Performance and Economic Growth in Nigeria: An Empirical Appraisal

This study is aimed at determining the role and contributions of the Nigerian stock market to national income in Nigeria from 1981 – 2012. This is necessitated by the concern as to whether a lean stock market like we have in Nigeria with an average of 240 quoted companies (within the period of study) with an average market capitalisation of N4 billion can significantly exact the much expected positive impact on total output. Four explanatory variables were specified for this study based on theoretical underpinning. Stationarity test were conducted using Augmented Dickey Fuller unit root test, while Johansen Cointegration test was used to estimate the long-run equilibrium relationship among the variables. The Granger causality test was conducted in order to establish causal relationship, while the model was estimated using the error correction model (ECM). Key words: Nigerian stock exchange, stock market performance, economic growth, capital formation, and cointegration