ABSTRACT

This study examines the impact of capital markets on economic development in Nigeria over the period of twenty-one years (2003 to 2023). Specifically, the study seeks to examine the relationship between the all-share index and economic development in Nigeria; to investigate the impact of market capitalization on economic development in Nigeria; to assess the influence of the total value of transactions on economic development in Nigeria; and to analyze the effect of the total volume of transactions on economic development in Nigeria.

The study employs the ex-post facto research design and employed the ordinary least squares (OLS) multiple regression analysis, to interpret the results and  using the E-views 10. The study found that market capitalization (MCAP) has a negative and statistically insignificant relationship with per capita gross domestic product, that total value transactions (TVT) has a positive and statistically significant effect on per capita gross domestic product, that volume of transactions (VOT) has a negative but non-statistically significant effect on per capita gross domestic product and that all share index (ASI), an indicator of stock market development, has a negative and insignificant effect on per capita GDP, thus suggesting a lack of depth of the market.  

The study concludes that the market capitalization, and all share index the major indicators of capital market development has both positive and negative but statistically insignificant effects on economic development in Nigeria. The study recommends, among others, that regulatory authorities should strive to ensure that the Nigerian capital market is fully developed by expanding the depth and breadth of the market.