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SUMMARY
This study analyzes the impact of stock market liquidity management on economic development in Nigeria. The finance sector plays a prominent role in the society as the operation of the sector can set energy for other sectors and development of an economy. Management of liquidity involves a daily analysis and detailed estimation of the size and timing of cash inflows and outflows over the coming days and weeks to minimize the risk that savers will be unable to access their deposits in the moment they demand them. Thus, liquidity is lifeblood of an economic system. Stock market capitalization is measured by the market capitalization ratio, which is defined as the value of shares listed divided by GDP. The coefficient of stock market capitalization was negative and significant. There is an expected negative relationship between economic development and stock market capitalization in Nigeria. This means that the lower the stock market capitalization, the higher the economic development. The total value of share traded is equivalent to the monetary units of the stocks that are traded in relation to outstanding stocks in the stock market. The coefficient of total value of share traded was negative and not significant. Therefore, we can reasonably conclude that effects of stock market liquidity on economic development will result in long term consequences capable of transforming the economy positively
