Responsiveness of Capital Market on the Output of Manufacturing Firms in Nigeria

Madubuko Cyril Ubesie, Matthew Emeziem Ude


Capital market provides the necessary lubricant that keeps turning the wheel of the economy. It does not only provide the funds required for investment but also efficiently allocates these funds to projects of best returns to investors. This study empirically examined the responsiveness of capital market on productivity (Output) of manufacturing firms in Nigeria (1990 – 2016). Specifically, the study examined the impact of Market capitalization, Total listed equities and All Share Index on the productivity (Output) of manufacturing firms in Nigeria. Annual time series data obtained from the Central Bank of Nigeria (CBN) statistical bulletin, 2016 edition was utilized. The study adopted the ex-post facto research design and employed the Autoregressive Distributed Lag (ARDL) bound test approach. The findings revealed that capital market indices of the Nigerian Stock Exchange (proxy by MCAP, TLE, and ASI) have long-run significant influence on the productivity of manufacturing firms in Nigeria. Based on these findings, it was recommended among others that there is need to restore confidence to the market by regulatory authorities through ensuring transparency and fair trading transaction and dealings in the stock exchange which in turn will help to improve economic growth in Nigeria; also that the private sector should be encouraged to invest in capital market to boost productivity (Output) and improve the growth of Nigerian economy.

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