The Impact of Capital Market on Industrial Development of Nigeria : Current School News

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

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


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.


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. 


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CSN Team.

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