Empirical Analysis of Capital Market on Capital Formation in Nigeria

Authors: Ajayi John Ayodele

Abstract:

This study examines the impact of capital market on capital formation in Nigeria from 1990-2023 using stock market indicators of All-Share Index, market capitalization, value of shares traded and volume of transactions while gross capital formation was proxied for capital formation. Secondary data were obtained from the Nigeria Exchange Group and Central Bank of Nigeria Statistical Bulletin. Regression analysis was employed to obtain results for the study. Findings from the study show that All-Share Index, market capitalization, value of shares traded, volume of transactions, were statistically significant to gross capital formation.  The statistical significance of all the variables shows the importance of capital market in capital formation hence government should take adequate measures to strengthen the capital market to boost the economy so as to provide better access to funds for investment purposes and hence, further stimulating capital formation which is an essential ingredient for economic growth.

Keywords: capital market, capital formation, Nigeria, regression analysis