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
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Authors
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
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Abstract
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.
Keywords
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
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Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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