Open AccessLeveraging On Capital Market for Sustainable Development in Nigeria.
Author(s) -
A.S. Ilemobayo,
AUTHOR_ID,
I.N. Onyenebo
Publication year - 2021
Publication title -
advances in multidisciplinary and scientific research journal
Language(s) - English
Resource type - Journals
ISSN - 2488-8699
DOI - 10.22624/aims/abmic2021-v2-p16
Subject(s) - spurious relationship , econometrics , cointegration , economics , variables , sustainable development , ordinary least squares , error correction model , market capitalization , inflation (cosmology) , capital market , statistics , stock market , mathematics , geography , context (archaeology) , physics , archaeology , finance , theoretical physics , political science , law
The role of capital market in economic growth and development and sustainable development cannot be relegated, hence this paper attempted to examine how capital market can be used to attain sustainable development in Nigeria. This paper becomes relevant in view of the fact that there has not been much work in this area and therefore fills that gap. Time series data collected for a period of 20 years spanning from 2000 to 2020. The dependent variable was Real Gross Domestic Product which served as proxy for sustainable development while other variable in the model were the independent variables. The Augmented Dickey Fuller test were used to test for the stationarity of the variables to avoid inconsistent and spurious data. The existence of long run relationship between the dependent and the independent variables were ascertained through the Johansen cointegration test. The granger causality were also tested to determine the direction of the variables and the Error Correction Model (ECM). The model were estimated using the OLS method. The results shows that 96% variations in the RGDP are explained in the model. The overall fitness of the model is explained by the F-Statistics value of 11.3 with a low probility of less than 5%. Findings reveals that the All Share Index (ASI), Market Capitalisation (MAC) and Number of Listed Companies (NIC) have positive but insignificant effect on sustainable development while Number of Listed Securities (NIS), Interest Rate (INR) and Inflation Rate (INF) all have negative and insignificant effect on sustainable development. It is therefore recommended that for capital market to lead to sustainable development, the more securities should be listed on the floor of the stock exchange, while the rate of interest rate and inflation rate should be reduced. Keyword: Stock Market, Economic Growth, Development, Sustainable Development, Nigeria