The Capital Market Contributions Toward Economic Development and growth Essay

Global Advanced Study Journal of Management and Business Studies (ISSN: 2315-5086) Vol. 2(2) pp. 120-125, February, 2013 Available online http://garj.org/garjmbs/index.htm Copyright В© 2013 Global Advanced Exploration Journals

Full Length Analysis Paper

The administrative centre market advantages towards monetary growth and development; the Nigerian knowledge Okoye Victor O1* and Nwisienyi Kenechukwu J2

2

Director Agency Unit, Government Polytechnic Oko, Anambra State, Nigeria Department of Financial and Financing, Federal Polytechnic, Oko, Anambra State, Nigeria Accepted 05 February 2013

1

This study examined the impact the capital market has on the Nigerian economy, applying time series data intended for 10-year period; 2000 – 2010. The model standards for the analysis of data is multiple regression and ordinary least squares evaluation techniques. The gross home-based product was adopted while the based mostly variable as the all-share index, market value and market capitalization were the independent variables. The result showed that there are significant relationship among share index, market value and market capitalization on GROSS DOMESTIC PRODUCT. This implies that the GDP is usually affected by the movement in the capital market's share index, market value and market capitalization. In other words, the administrative centre market provides impacted substantially on the overall economy for the many years movement under assessment. Keywords: Capital Market, economy, analysis, Nigeria INTRODUCTION The growth and progress an overall economy, depends considerably on how the country's capital market grows. The capital marketplace can be an essential facilitator of economic development (Applegarth, 2004). Osaze (2000) is of the lovely view that the capital market pushes any economy to growth and development because the long term growth capital formation stems from it. Monetary growth within a modern economic climate hinges on an effective financial sector that pools domestic savings and mobilizes foreign capital for productive investments. (Bekaert and Harvey, 1997). Capital market offers access to a variety of financial devices that permit economic agents to pool, price and exchange risk. Through resources with attractive yields, fluidity and risk characteristics, this encourages personal savings in financial kind. This is very necessary for government and also other institutions needing long-term cash and for suppliers of long-term funds. (Nwankwo, 1991). Based on its importance in increasing economic development and growth, government of all nations tend to have keen involvement in the efficiency of their capital marketplace (Ewah, Esang and Bassey, 2009). The main city market has been identified as a great institution that contributes to the socio-economic development and growth of growing and developed economies. (Donwa and Odia, 2010). Most of the time, the importance with the capital industry to any overall economy (developed or emerging) may not be swept beneath the carpet. An immediate linkage continues to be discovered to exist between capital marketplace of a nation and its financial growth. Linkages were also located to exist between international direct purchase (FDI), stableness of capital market (which will suggest stability inside the economy), options for finance pertaining to economic development, investment method for excess fund and so forth and the capital market. (Oladipupo, 2010).

*Corresponding Author's E-mail: [email protected] com

Okoye and Nwisienyi, 121

The concept of capital market The administrative centre market can be seen as any system organized intended for trading financial assets or perhaps liabilities. Financial assets will incorporate all forms of securities which range from common stocks to derivatives. The primary function of the capital market is to allow funds to become effectively allotted from the extra units throughout the economy to the debt units for productive assets. Indeed, with such system, corporate financial managers have access to a wide range of options for finance and instruments. The Nigerian capital market supplies the necessary lube that keeps turning the wheel of the...



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