TITLE:
An Empirical Assessment of the Impact of Nigerian all Share Index, Market Capitalization, and Number of Equities on Gross Domestic Product
AUTHORS:
Obubu Maxwell, Obiora-Ilouno Happiness, Uzuke Chinwendu Alice, Ikediuwa Udoka Chinedu
KEYWORDS:
Nigerian Stock Market, Gross Domestic Product, Market Capitalization, All Share Index, Augmented Dickey-Fuller Test, Breusch-Godfrey Test, Serial Correlation Lm Test
JOURNAL NAME:
Open Journal of Statistics,
Vol.8 No.3,
June
25,
2018
ABSTRACT: A stock exchange is an exchange where stock brokers
and traders can buy and sell shares of stock, bonds, and other securities. All
listings are included in the Nigerian Stock Exchange All Shares index. In terms
of market capitalization, the Nigerian Stock Exchange is the third largest
stock exchange in Africa. Objectives: The paper assesses the impact of
Nigerian Stock Market (all share index, market capitalization, and number of
equities) on Gross domestic product (Economic Growth). Materials and Methods: Regression analysis and ordinary least square technique were employed. Result
and Discussion: The series was stationary
at 1%, 5%, and 10% α level; the residuals were normally distributed but not serially correlated at
5% α level. All Share Index, Market Capitalization and Total Number of listed
Equities have a joint and individual significant effect on Economic Growth
(Gross Domestic Product) with Total Number of listed Equities having a negative
(opposite) linear relationship with the Gross Domestic Product. The
Durbin-Watson statistics (R2 = 0.9910 = 1.3686) suggest that the model is not spurious and
it is devoid of positive and negative autocorrelation (DW = 1.3686
> dl = 1.07 and DW = 1.5033 -du = 2.17). Therefore, it can produce meaningful
result when used for forecasting a positive relationship between gross domestic
product, all share index and market capitalization with a 99.1% R-square value.
Significant Positive connection between all share index, market capitalization,
the number of equities and gross domestic product suggests that government
policies and bills aimed towards rapid development of the capital market should
be initiated.