CAPITAL MARKET TRANSACTIONS AND INDUSTRIAL GROWTH IN NIGERIA (1986-2014): AN EMPIRICAL INVESTIGATION
Abstract
Industries in Nigeria have depended mainly on short-term funds to finance even long-term industrial concerns, and this have had a discouraging trend on the growth of the nations industrial sector; with the sector’s capacity utilization still below 35% and contributing less than 5% to the GDP and employment generation respectively. This study examines the capital market transactions on the Nigerian industrial growth. And in line with the objective which seeks to determine to what extent the capital market has aided the growth and development of the industrial sector in Nigeria, secondary data were obtained from CBN statistical bulletin, covering the period of 1986 to 2014, a multiple regression model was formulated and the OLS estimation technique was employed using the E-views version 7.0 software packages to analyze the data. The Industrial Growth proxy by index of industrial production (IIP) was adopted as the dependent variable while capital market variables of Government stock (GOVT), Industrial Bond (INDB) and Equities (EQTY) formed the independent variables. The empirical results revealed that over 52% variation in the dependent variable is caused by the independent variables. While (INDB) and (EQTY) were statically significant, (GOVT) was insignificant at 5% level. Also, the coefficient value of the independent variables showed that (GOVT) and (EQTY) have a positive impact on (IIP) while (INDB) was found to have a negative effect. The authority is thus advised to improve dealings in the capital market and encourage more foreign investor’s participation in the market, and equally provide enabling environment for industries in the country by investing generally on infrastructural facilities such as power, water, transportation, security and so on.
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