Financial Sector Reforms, Stock Market Development and Economic growth in Nigeria: 1970-1993
Keywords:
financial market, economic growth, securities, exchange rate, financial systems, financial liberalization, NigeriaSynopsis
This study provided an empirical analys:s of the impact of financial sector reforms
on Stock Market Development in Nigeria. The study also verified the relevance of Stock
Market for economic growth. To achieve the above stated objectives, three equations
were fonnulated and using time series quarterly data, Two Stage Least Squares(2SLS)
estimation technique was employed to estimate the parameters of our variables for the
period 1970-1993.
The results of the Stock Market Equation show that financial sector reforms had
contributed significantly to Stock Market Development in Nigeria. For the growth
equation, Stock Market index indicates a positive' and significant association with
economic growth.
The policy implication-of the f'i ndi,,n gs are, first, government should avoid financial
repression and lean more to~ar-ds- lhe side of carefully designed and consistently
implemented policy of deregulation since financial reform affects Stock Market
development positively. Particular attention should be given to exchange rate and
financial structure policies because of tl1eir possible destauilizing effects if not well
managed. Second, policy makers should endeavour to encourage S_tock Market
development so as to actualise their vision of sustained and real growth in the furure.
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Published
June 13, 1998
Series
Copyright (c) 1998 CODESRIA Books Publication System
