FINANCIAL DEEPENING AND STOCK MARKET DEVELOPMENT IN NIGERIA
Asagba Ejiroghene Victoria and Philip Alege
Volume 1 Issue 1
Abstract
This study examines the relationship between financial deepening and stock market development in Nigeria. Annual data for stock market capitalization, money supplyGDP ratio, domestic real credit, trade openness, and foreign direct investment for the period 1981-2020 were analysed using Time series analytical techniques. The study employed the Augmented Dickey fuller unit root test. Findings from the analysis conclude that financial deepening has positive effect on stock market development in the long run in Nigeria. However financial deepening does not have significant effect on stock market development in Nigeria in the short run. The study therefore recommends that effort should be made to enhance financial deepening which will make more funds available to the private sector. Furthermore, rate on short term loans and advances should also be reduced for stock purchased purposes Keywords: Financial deepening and stock markets development, market capitalization, broad money supply
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