Capital Market, Financial Deepening and Nigeria’s Economic Growth: Empirical Evidence


  • Raymond Osi Alenoghena Department of Economics, Faculty of Social Sciences University of Lagos, Akoka Lagos



Capital market, Financial deepening, Economic growth.


This study investigates the contributions of capital market and financially deepening to economic growth in Nigeria over the period of 1981 to 2012.  The analysis involves examining the stochastic characteristics of each time series variable by testing their stationarity using Augmented Dickey-Fuller (ADF) test and estimates the error correction mechanism model. The study revealed that Stock Market Capitalization, Narrow Money Diversification (involving credit to the private sector) and Interest Rate significantly impacted the promotion of economic growth of the country during the period of study. Though, other measures of liquidity represented by Financial Development (FID) and Monetization Ratio (MTR) were not significant in explaining the trend in economic growth, they exhibited very strong coefficients in the process. The study recommends that Government and other stakeholders in the economy should take measures further to improve the liquidity of the financial market to enhance overall economic efficiency in the country. In addition to proper monetary policy management, the study further recommends that concrete steps be taken to improve the activities of the Nigerian stock market.


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