Title: Financial Market Indices and Economic Growth in Nigeria.
Authors: Oghenero Godday Oboro, PhD
Volume: 10
Issue: 5
Pages: 42-49
Publication Date: 2026/05/28
Abstract:
This study investigates the relationship between financial market indices and economic growth in Nigeria from 2000 to 2025. Specifically, it examines the effects of market capitalization (MCAP), value traded (VT), number of listed companies (NLC), and turnover ratio (TR) on GDP growth (GDPG). Using time series data and econometric techniques including unit root tests, error correction modeling, and regression analysis, the study finds that financial market indicators influence economic growth to varying degrees. MCAP exhibits a marginal long-run negative effect, VT and TR contribute positively but not significantly, while NLC has limited direct impact. The negative and significant error correction term indicates a strong mechanism for restoring long-run equilibrium aftershocks. Diagnostic tests confirm that the model is robust, well-specified, and free from heteroskedasticity and autocorrelation. The findings highlight the importance of active, liquid, and broad financial markets in sustaining economic growth in Nigeria. Policy measures to deepen market size, enhance liquidity, and improve investor participation are recommended to strengthen the contribution of financial markets to national economic development.