AN ASSESSMENT OF MARKET CAPITALISATION AND GDP GROWTH TRENDS IN NIGERIA

Abstract

This research work investigated the assessment of the market capitalisation and Gross Domestic Product (GDP). This is due to the fact that capital market acts as a medium where investors and users of fund for long term investment source for capital. The major problem that leads to this research work is that, the need for capital growth and development is not enough and suppliers of capital could invest via various instruments and raise capital through various instruments. However, this research project wants to determine the contribution of manufacturing sector and market capitalisation to GDP. To enable this study gain greater insight into the work, Data were collected from secondary sources and analysed using Autoregressive Distributed- Lag (ARDL) modeling framework and Error Correction Models (ECM) to differentiate between long-run and short-run dynamics. A Bound Test was applied to discern whether variables exhibited levels or first-order difference relationships, crucial for understanding stationarity. The finding revealed that lag market capitalisation (LMKC) and lag manufacturing (LMNF) in the conditional error correction regression indicate that these variables do not exert significant short-term influence on GDP growth. However, the study recommend that federal government should: promote increased investment in research and development within the manufacturing sector; improve infrastructure, including reliable power supply, transportation networks, and access to water; collaborate with relevant regulatory bodies to ensure products meet international quality standards; put measures that will strengthen the capital market, including the Nigerian Stock Exchange (NSE); initiate policies that will support the listing of Small and Medium Enterprises (SMEs) on the stock exchange among others.