The Role of Capital Market on Industrial Development in Nigeria

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Published: 2022-06-01

Page: 277-286

Michael Akpan Udofia

Department of Economics, University of Uyo, P.M.B. 1017, Uyo, Akwa Ibom State, Nigeria.

Emmanuel Ating Onwioduokit

Department of Economics, University of Uyo, P.M.B. 1017, Uyo, Akwa Ibom State, Nigeria.

Ubong Edem Effiong

Department of Economics, University of Uyo, P.M.B. 1017, Uyo, Akwa Ibom State, Nigeria.

*Author to whom correspondence should be addressed.


This paper was a shot to scrutinize the effect of the Nigerian capital market on industrial development for the era 1986 to 2018. Data were obtained from the CBN statistical bulletin and were subjected to diagnostic test, Bounds test, and the error correction mechanism. The capital market index was captured by market capitalization while industrial performance index was captured by the contribution of the industrial sector to GDP. The study utilized the ADF stationarity test, Bounds test for long-run relationship, and error correction model (ECM). Findings of the study exposed that the Nigerian capital market positively and significantly influences the industrial sector performance in the short-run and in the long-run. The result of the Bounds test indicated the existence of a ‘levels relationship’. The ECM indicated that 41.64% of the short-run imbalance is rectified yearly. It is in this line that the study recommended that there should be enhancement of the financial systems arrangements and the overall economic infrastructures to shrink pressure in the system.

Keywords: Capital market, industrial performance, industrialization, market capitalization

How to Cite

Udofia, M. A., Onwioduokit, E. A., & Effiong, U. E. (2022). The Role of Capital Market on Industrial Development in Nigeria. Asian Basic and Applied Research Journal, 4(1), 277–286. Retrieved from


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