Ads: Get Admission into 200 Level and Study any Course in any University of Your Choice. Low Fees | No JAMB UTME. Call 09038456231

The Impact of Capital Market on Industrial Development of Nigeria (2000-2015)

ADS! Obtain Up to N300,000 Cash in the 2020 Aspire Contest

The Impact of Capital Market on Industrial Development of Nigeria (2000-2015).

ABSTRACT  

The study empirically examined the impact of capital market on industrial development of Nigeria using a time series data covering a period of 16years (2000-2015). The industrial sector was proxied by Real gross domestic product of the industrial sector, industrial loan and average capacity utilization rate of the manufacturing sector. Capital market variables considered include annual market capitalization of the industrial sector and value of traded securities of the industrial sector while inflation rate was included as a control variable.

The ordinary least square (OLS) regression model was used to analyze the data collected. In addition, the simple and multiple regression models were used with the aid of statistical package for social science (SPSS) software package. The study revealed that annual market capitalization has a positive and significant impact on the gross domestic product of the industrial sector. Value of traded securities has a positive and significant effect on the gross domestic product of the industrial sector.

Value of traded securities and annual market capitalization jointly predicts industrial loan issued, but none impacted significantly. Finally, the value of traded securities, annual market capitalization and inflation rate are all joint predictors of average manufacturing capacity utilization rate of the industrial sector, but none impacted significantly. Based on the findings of this study, it was recommended among others that government should put in place necessary infrastructures.

INTRODUCTION  

Industrialization can be seen as the backbone for economic advancement in any nation, be it capitalist, socialist or a mixed economy. The possession of industrial capabilities by an economy is considered an important potential for improved economic growth and development. It can be viewed as a veritable channel of attaining the lofty and desirable conception and goals of improved quality of life for the populace.

This is because industrial development involves extensive technology-based development of the productive (manufacturing) system of the economy. In other words, it could be seen as a deliberate and sustained application and combination of suitable technology, management techniques and other resources to move the economy from the traditional low level of production to a more automated and efficient system of mass production of goods and services (Ayodele & Falokun, 2003).

According to Kayode (2015), While Nigeria and most other developing countries are still struggling to catch up with the developed countries, in terms of industrialization, the world has since moved from the age of industrial revolution to globalization! Nigeria has performed poorly and far below expectation, in the area of industrialization, when compared to some regional and global counterparts.

For instance, in the United States, Brazil, China, India and South Africa, the manufacturing sector contributes 13 per cent, 15 per cent, 30 per cent, 14 per cent and 15 per cent to their Gross Domestic Product, while employing 13 million, 15 million, 100 million, 30 million and 1.5 million people respectively. In Nigeria, the manufacturing sector contributes a meager four per cent to their GDP, while employing only two million people. 

BIBLIOGRAPHY

Abdulkadir, A. (1981). Financing Industrial Development in Nigeria. Business Times
Newspaper. May 4.pp16.

Adamu, J.A., & Sanni. I (2005). Stock Market Development and Nigerian Economic
Growth. Journal of Economic and Allied Field 2(2), 116-132.

Afees, A.S., & Kazeem, B.A (2010). The Stock Market and Economic Growth in
Nigeria: An Empirical Investigation, Journal of Economic Theory, 4, 65-70.

Agarwal, S. (2001). Stock Market Development and Economic Growth: Preliminary
Evidence from African Countries, Web Document. Retrieved 28th June, 2014.

Akingboungbe, S.S. (1996). The Role of the Financial System in the Development of the
Nigeria Economy. Paper presented at a workshop organized by the Centre for
Africa Law and Development Studies.

Al-Faki, M. (2006). The Nigeria Capital Market and socio-economic Development.
Paper presented at a Distinguished Faculty of Social Science Public lecture,
University of Benin, 26:9-16

Al-Faki, M. (2007). Capital Market Reforms and Real Sector Financing: What Option?
SEC News.4 (1), October

Arnold, G. (2005). Corporate financial management (3.ed.). Harlow [u.a.]: Financial
Times/Prentice Hall. p. 354.

Ariyo A., & Adelegan O. (2005). Assessing the impact of Capital Market Reforms in
Nigeria: An increment Approach. Paper presented at the 46th annual conference of
the Nigeria Economic Society in Lagos in August 2005.

CSN Team.

Enter your email address:

Delivered by TMLT NIGERIA

Join Over 3,500 000+ Readers Online Now!


=> FOLLOW US ON INSTAGRAM | FACEBOOK & TWITTER FOR LATEST UPDATES

ADS: KNOCK-OFF DIABETES IN JUST 60 DAYS! - ORDER YOURS HERE

COPYRIGHT WARNING! Contents on this website may not be republished, reproduced, redistributed either in whole or in part without due permission or acknowledgement. All contents are protected by DMCA.
The content on this site is posted with good intentions. If you own this content & believe your copyright was violated or infringed, make sure you contact us at [[email protected]] to file a complaint and actions will be taken immediately.

Tags: , , , ,

Comments are closed.