Impact Of Capital Market On Industrial Sector Performance In Nigeria (1970-2012)

ABSTRACT

The study empirically investigated the impact of capital market on industrial sector performance in Nigeria between 1970-2012. The capital market was set up to achieve specific objectives which would boost the economy such as encourage domestic savings and increasing the quantity and quality of investments. The industrial sector performance was proxy by industrial output. Capital market variables considered include market capitalization, total new issue, volume of transaction, and total listed securities. The econometrics data analysis techniques of ordinary least square (OLS), co-integration/error correction model and granger causality test were utilized. The study revealed that capital market indices had not impacted significantly on the industrial sector during the period under study. Based on the findings of this study, it is recommended among others that regulators of the Nigerian capital market should encourage small & medium scale industries, oil and gas companies, telecommunication firms and electricity companies to list on the Exchange by reducing their fees, relaxing stiff conditions and equally adopt a zero -tolerance policy against all infractions in the market. Most importantly, 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 which is the engine room of inclusive growth and job creation. The study recommends among others that government should objectively evaluate enacted laws and reforms agenda in a manner that will enhance economic growth rather than considering political issues before embarking on reforms.

Key words: market capitalisation, industry, economy, development, growth, performance,

stock, shares, mobilisation, tradingjloor