THE IMPACT OF CAPITAL MARKET ON INDUSTRIAL DEVELOPMENT OF NIGERIA (2000-2015)

THE IMPACT OF CAPITAL MARKET ON INDUSTRIAL DEVELOPMENT OF NIGERIA (2000-2015)

 

ABSTRACT 

The study empirically examined the impact of capital market on industrial development of Nigeria using a time series data covering a period of 16years (2000-2015). The industrial sector was proxied by Real gross domestic product of the industrial sector, industrial loan and average capacity utilization rate of the manufacturing sector. Capital market variables considered include annual market capitalization of the industrial sector and value of traded securities of the industrial sector while inflation rate was included as a control variable. The ordinary least square (OLS) regression model was used to analyze the data collected. In addition, the simple and multiple regression models were used with the aid of statistical package for social science (SPSS) software package. The study revealed that annual market capitalization has a positive and significant impact on the gross domestic product of the industrial sector. Value of traded securities has a positive and significant effect on the gross domestic product of the industrial sector. Value of traded securities and annual market capitalization jointly predicts industrial loan issued, but none impacted significantly. Finally, the value of traded securities, annual market capitalization and inflation rate are all joint predictors of average manufacturing capacity utilization rate of the industrial sector, but none impacted significantly. Based on the findings of this study, it was recommended among others that government should put in place necessary infrastructures and policy reforms that will enable the Nigerian capital market to effectively and efficiently mobilize long-term funds for the development of the industrial sector.