Synergy Between the Nigeria Banking Sector and the Nigerian Stock Exchange as Nigeria Economy Development Agents (2007-2016)
Journal of Business and Economic Development
Volume 3, Issue 3, September 2018, Pages: 68-76
Received: Sep. 14, 2018; Accepted: Oct. 16, 2018; Published: Nov. 16, 2018
Views 440      Downloads 63
Rebecca Folake Bank-Ola, Department of Economics, Adeleke University, Ede, Nigeria
Comfort Bosede Olopade, Department of Economics, Adeleke University, Ede, Nigeria
Akinyele Akinwumi Idowu, Department of Economics, Adeleke University, Ede, Nigeria
Nureni Adekunle Lawal, Department of Mangt and Accting, Ladoke Akintola University of Technology, Ogbomosho, Nigeria
Article Tools
Follow on us
The study is designed to examine the impact of banking and the stock exchange on the economic development of Nigeria and the interplay of relationship between these two major financial institutions as agents of economic development between 2006 and 2016. The independent variables were: Market Capitalization, Total Securities Listed (for the Nigerian Stock Exchange) and Total Bank Deposit and Domestic Credit to Private Sector by (for Banks). Gross Domestic Product, the barometer of economy development, is the dependent variable. These secondary data were sourced from National Bureau of Statistics (NBS), Nigeria Stock Exchange publications and various issues of Central Bank Nigeria statistical bulletin. Data were analyzed using OLS, regression analysis. From the analysis performed, the development in Nigeria’s stock market has positive significant relationship with economic growth both in short and long run. The result dispelled the adeptness of Nigeria stock market to propel growth. GDP = -3614.57 + 0.288 MC + 4.67 TBC + e. Result of regression of each agent variables to the national GDP showed stock market to be dominant. This is rather surprising because if the financial performance indicators of the banks and stock exchange indices were something to go bye, they ought to be moving in the same direction and relative degree as development catalytic agents. Policy makers must urgently look into this.
Market Capitalization, Liquidity, Regression, Economic Growth
To cite this article
Rebecca Folake Bank-Ola, Comfort Bosede Olopade, Akinyele Akinwumi Idowu, Nureni Adekunle Lawal, Synergy Between the Nigeria Banking Sector and the Nigerian Stock Exchange as Nigeria Economy Development Agents (2007-2016), Journal of Business and Economic Development. Vol. 3, No. 3, 2018, pp. 68-76. doi: 10.11648/j.jbed.20180303.12
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Ahmed, A. D. (2008). Financial Liberalization, Financial Development and Growth in Sub- Saharan Africa’s Economic Reform: An Empirical Investigation. Centre for Strategic Economic Studies, Victoria University, Australia.
Afolabi, A. A. (2015). Impact of the Nigerian Capital Market on the Economy. European Journal of Accounting Auditing and Finance Research Vol. 3 No.2.
Bouzid A (2012). The Relationship of Oil Prices and Economic Growth in Tunisia: A Vector Error Correction Model Analysis, Romanian Economic Journal, 2012, vol. 15 (43).
Central Bank of Nigeria (2008). Central Bank of Nigeria’s Statistical Bulletin. Golden Jubilee Edition.
Goldsmith, R. W. (1969). Financial Structure and Development. New Haven, Conn. Yale University Press.
Gujarati, D. N. (1995). Basic Econometrics (ed). London: McGraw-Hill, Inc.
Ikikii, S. M. and Nzomoi, J. N. (2013). An analysis of the effects of stock market development on economic growth in Kenya. International Journal of Economics and Finance. 5(11),
Kargi, H. S. (2011). Credit Risk and the Performance of Nigerian Banks, Ahmadu Bello University, Zaria.
Koirala, J. (2011). The Effect of Stock Market Development on Economic Growth: An Empirical Analysis of UK, Electronic copy available at:
Kolapo, F. T. and Adaramola, A. O. (2012). The Impact of the Nigerian Capital Market on Economic Growth (1990-2010), International Journal of Developing Societies, Vol. 1(1).
McKinnon, R. I., (1973). Money and Capital in Economic Development, Brookings Institution, Washington, DC, USA.
Murty, K. S., Sailaja, K. and Demissie, W. M. (2012). The Long-Run Impact of Bank Credit on Economic Growth In Ethiopia: Evidence from Johansen’s Multivariate Co- Integration Approach, European Journal of Business and Management, Vol. 4 (14).
Nwakanma, P. C. and Nnamdi, I. S. (2012). Marketing of Financial Services In Nigeria: Theory and Developments, Owerri, Strammac Communications Consult.
Oke, B and Mokuolu, J. (2004). Stock Market Development and Economic Growth in Nigeria: An Empirical Analysis, Nigeria Journals of Banking and Financial, Vol. 6.
Olowe, O. (2009). ”Ethics and Problems of Fortune and Misfortune in the Nigerian Stock Exchange.” Nigerian Sociological Review Vol.4 (1&2).
Osinubi, T. S. (2002). Lag in the Monetary Transmission Mechanism and Policy effectiveness in Nigeria, First Bank of Nigeria Quarterly Review, Vol. 2 (2).
Owolabi, A. and Ajayi, N. O. (2013). Econometric Analysis of Impact of Capital Market on Economic Growth in Nigeria (1971-2010), Asian Economic and Financial Review, 3(1).
Shaw, E. S. (1973). Financial Deepening in Economic Development. Oxford University Press, London and New York.
Smith, T. R. (2011). Agency Theory and Its Consequences; Master Thesis at Copenhagen Business School, Department of Management Politics & Philosophy.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186