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ABSTRACT
This study is centered on an empirical evidence of capital market and economic growth in Nigeria. The capital market is a network of financial institutions and infrastructure that interact to mobilize and allocate long-term funds in the economy. The capital market is a highly specialized and organized financial market and indeed an essential agent of economic growth because of its ability to facilitate and mobilize saving and investment. The general objective of the study was to examine the impact of Capital Market on economic growth in Nigeria. Specifically amongst others, the study also Evaluate the impact of market capitalization on capital formation and real gross domestic product in Nigeria. Five research question were also raised to guide the study as well as fives hypotheses were also formulated to check for the trueness of the study. The data used for the study were obtained from secondary sources and these data were analyzed using multiple regression analysis. The results obtained from the study indicates that the direct and significant impact of Market Capitalization , Value of Transaction Traded and Foreign Direct Investment on both real gross domestic product and gross fixed capital formation in Nigeria were as a result of the internationalization of the Nigerian capital market (stock exchange) to the outside world that lead to increase in market capitalization, volume of transaction traded, high inflow of foreign investment and thereby cause economic growth in Nigeria. Based on the findings, the study recommended amongst others that Securities and Exchange Commission should deepening policies towards improvement in market capitalization, value of transaction traded and all share index of the Nigerian Stock Exchange by encouraging more foreign investors to participate in the market as well as maintaining or improving state of the art technology like upgrade on automated trading and settlement practices, electronic clearance and eliminate physical transfer of shares.
