Impact Assessment of Capital Market on Industrial Growth and Development in Nigeria from 1985-2015 (A Survey of Nigeria Capital Market)

International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue III, March 2018 | ISSN 2454-6186

Impact Assessment of Capital Market on Industrial Growth and Development in Nigeria from 1985-2015 (A Survey of Nigeria Capital Market)

Augustine Okon Jacob

  Department of Management, School of Management Science, Heritage Polytechnic, Ikot Udota, Eket

Abstract: – This study examined whether or not stock market promotes industrial growth and development in Nigeria. To achieve this objective, multiple linear regression analysis was used to establish the relationship between capital market and industrial growth and development from 1985-2015. The result indicated that there is a jointed long- run positive relationship between industrial growth and development for all the stock market variables used. By 95.58% R-squared and 94.85% adjusted R-squared, the result showed that industrial growth and development in Nigeria is adequately explained by the model for the period between 1985 and 2015. By implication 94.85% of the variation in the growth of industrial activities is explained by the independent variables. The result of the study stabled a jointed long-run positive links between the stock market and industrial growth and development. The capital market variables captured in the model such as market capitalization, money supply, government expenditure and interest rate, they both have positive and negative relationship with industrial productivity, except the constant term and level of money supply (MS). Government is therefore advise to put up measures to stem up investors’ confidence and activities in the market and increase market capitalization so that it could contribute significantly to the sector, and suggested pursuit of policies geared towards rapid development of the stock market. Also, all sectors of the economy should act in a collaborative manner such that the optimum benefits of linkages between the stock market and industrial growth and development can be realized in Nigeria.

Keywords: Expenditure, Government, Nigeria, Productivity, Stock Market

I. INTRODUCTION

The capital market is a common feature of every modern economy and is reputed, amongst other things, to perform critical allocation function which promote industrial growth and stimulate orderly industrial development (Enisan, and Olufisayo, 2009; Olowe, 1997).

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