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Stock Market Performance, Domestic Investment and National Output Interactions: Vector Error Correction Model (VECM)
Euro-Asian Journal of Economics and Finance
View Archive Info| Field | Value | |
| Title |
Stock Market Performance, Domestic Investment and National Output Interactions: Vector Error Correction Model (VECM)
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| Creator |
Elix, Arikpo Oka
Okon, Efut Dominic Nsa, Ekeng Ekpenyong Nsa, Ekeng Ekpenyong Emmanuel, Edem Victor |
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| Description |
This study examined the interactions stock market performance, domesticinvestment and national output in Nigeria. The study specifically assessed whether thereis a long run and short run causal relationship running from stock market performanceto domestic investment and output in Nigeria. Stock market performance was measuredusing market capitalization, total new issues, number of listed companies, value oftransactions and turnover ratio. The data for the study were source from the CBNstatistical bulletin for the period 1981 to 2015. The exploratory design was combinedwith the ex-post facto research design; the data collection method was desk survey. Thestudy used the Vector Error Correction Mechanism (VECM) for data analysis. Findingsfrom the analyses showed that there is no long run causality running from stock marketperformance variables such as market capitalization, total new issue, number of listedcompanies, value of transaction and turnover ratio to output and domestic investment inNigeria; also, there is no short run causality running from stock market performanceindices such as total new issue, value of transaction and turnover ratio to output inNigeria; furthermore, stock market performance variables such as market capitalizationand number of listed companies exert short run influence on national output in Nigeriaand lastly, stock market performance variables such as market capitalization, total newissue, number of listed companies, value of transaction and turnover ratio have nosignificant effect on domestic investment in Nigeria in the short run. The study on thebasis of these findings recommends that all the tiers of government should be encouragedto fund their realistic developmental projects through the stock market to make the stockmarket performance impressive enough as to trigger national output in Nigeria. Lastly,development banks and other long term institutional investor should be encouraged toinvestment a large percentage of its total deposit liabilities in the stock market.
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| Publisher |
Academy of Business & Scientific Research
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| Date |
2017-10-17
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://absronline.org/journals/index.php/eajef/article/view/736
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| Source |
Euro-Asian Journal of Economics and Finance; Vol 5 No 3 (2017): Euro-Asian Journal of Economics and Finance; 90-105
2310-4929 2310-0184 |
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| Language |
eng
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| Relation |
http://absronline.org/journals/index.php/eajef/article/view/736/752
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