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Interconnectedness between stock market and economic growth in Nigeria: Evidence from Yamamoto and pairwise approaches

Year: 2025

Type: article

Abstract: This study examined the causal relationship between the stock market and economic growth in Nigeria from 1980 to 2023.Four key indicators of the equity market -market capitalization ratio, total value of shares traded, number of quoted 􀅫irms, and turnover ratio were employed to ascertain the 􀅫low of causality between stock market activity and economic performance.To achieve this, the study utilized the dynamic Toda-Yamamoto causality model alongside the conventional Pairwise Granger Causality technique for a comprehensive analysis.Notably, the two methods yielded somewhat divergent results; however, a key and reliable 􀅫inding indicates a strong one-way causality from economic growth to stock market performance, particularly affecting market capitalization and turnover ratios.This outcome supports the demand-following hypothesis.Based on these 􀅫indings, it is recommended that policymakers and regulatory authorities formulate and implement strategies aimed at increasing stock market listings and attracting new investors, thereby equipping the capital market with the necessary resources to signi􀅫icantly enhance Nigeria's economic development.

Source: Journal of administrative and business studies

DOI: 10.20474/jabs-11.1.1

Authors: Ndubuisi Udemezue, Uche Unachukwu, Catherine Nneli

Institutions: Alex Ekwueme Federal University, Ndufu-Alike, Imo State Polytechnic Omuma

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W4413035713