Globalization and Capital Market Development in Nigeria
Journal Title: Journal of Economics and Business - Year 2019, Vol 2, Issue 2
Abstract
The Nigerian capital market has undergone different phases coupled with diverse challenges which impeded the growth of the market and its integration into the world financial market. This study investigated the effect of globalization on the capital market in Nigeria from 1986 to 2017 using secondary data from the Central Bank of Nigeria Statistical Bulletin. Augmented Dickey – Fuller (ADF), Bound Test and Autoregressive Distributed Lag were employed to evaluate the effect of trade openness, foreign direct investment, and foreign portfolio investment on market capitalization in Nigeria. The results of the unit root test revealed that both trade openness and market capitalization were stationary at first difference while foreign direct investment and foreign portfolio investment were stationary at level. Also, the long-run equilibrium relationship was found among the variables based. The ARDL revealed that both trade openness and foreign portfolio investment had a positive and significant effect on market capitalization both in short run and long run while foreign direct investment had a negative and insignificant effect on market capitalization in short run and long run. In line with findings, it was concluded that globalization had a significant effect on the economy through openness and the inflow of foreign capital. The study recommended that there is a need for total liberalization of the economy in order to reap the full benefits of globalization in the economy. The government should formulate a policy that will reduce or discourage the expatriation of profit by foreign investors to foreign countries. Finally, innovative financial instruments should be introduced in the market for the purpose of attracting foreign investors.
Authors and Affiliations
Samson Olusegun Akinwale, Oludayo Elijah Adekunle
Keywords
Related Articles
- EP ID EP597998
- DOI 10.31014/aior.1992.02.02.95
- Views 93
- Downloads 0
The Accounting Standardization System for Public Administrations and the Impact of their Adoption on Higher Education in Portugal
The Accounting Standardization System for Public Administrations (SNCAP) was approved by Decree-Law no. 192/2015 (DL) of September 11 and constitutes the new accounting system for public administrations. With the approva...
The Effects of Booming Credit Growth on the Soundness of Commercial Banks: Empirical Research with the Case of Vietnam
The research aims at investigating the impacts of rapid credit growth in Vietnam, that is called booming period occurred from 2007 to 2010, on the soundness of the Vietnamese commercial banks with quantitative methods. B...
Gender Gap in SME Ownership: Are Women Left Behind? Evidence from Sri Lanka
The current study examines the gender gap in SME ownership and socio-economic factors which lead women to start Small and Medium Enterprises (SMEs) in Sri Lanka. The study conducted enterprise survey with 329 SME owners...
Digital Marketing in Banking Activities – Suggestions for Vietnam Banks from International Experiences
Based on the innovation of science and technology in a fierce competitive environment, digital marketing has emerged as an inevitable trend for businesses with no exception from banking areas. With the target of reaching...
Measuring National Character Toward Developing A Research Method for International Accounting Studies
This study measures national character in seven developed countries, based on social capital concept. Evaluating national character in developed countries help cross-country study on accounting system. The measurements o...