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ABSTRACT
The study empirically examine the relationship between financial openness, foreign portfolio investment and stock market development in Nigeria for the period 1990 to 2022 (33 years). The specific objectives of the study were to ascertain if financial openness (FOPN), foreign portfolio investment (FPI), market liquidity (MLIQ) and exchange rate (EXRT) affect stock market development (SMD) in Nigeria. To this end, the fully modified least square econometric technique was employed in the analysis of data, and the results obtained indicated that foreign portfolio investment (FPI) has significant negative relationship with stock market development in Nigeria; financial openness (FOPN) has a weak positive relationship with stock market development; while market liquidity (MLIQ) and exchange rate (EXRT) has a weak negative relationship with stock market development in Nigeria. It was concluded that, in the determination of stock market development in Nigeria, foreign portfolio investment (FPI) is the only factor to be considered in this regard within the period of investigation. The study therefore recommends among others that, government should review and overhaul the current trade liberalization policy with a view to making it more foreign investors friendly by abrogating some of the crude and stringent rules that seem to be inhibiting inflow of foreign investment. By so doing, it will make the Nigerian stock market more competitive in the global financial flows, attract more foreign portfolio investors and in turn impact positively on the overall market development
