UIJRT » United International Journal for Research & Technology

Empirical Analysis of the Nexus Between Capital and Money Markets in Nigeria

Gbenga Festus Babarinde

Total Views / Downloads: 67 

Cite ➜

Babarinde, G.F., 2020. Empirical Analysis of the Nexus Between Capital and Money Markets in Nigeria. United International Journal for Research & Technology (UIJRT), 2(2), pp.67-70.

Abstract

This paper examined the relationship between money and capital markets in Nigeria from 1981 to 2019. Thus, correlation and pairwise Granger causality analytical techniques were applied to the annual times series data obtained from the Central Bank of Nigeria’s statistical bulletin. Empirical findings indicate the existence of a strong positive correlation between money and capital markets in Nigeria. The study also established evidence of a long-run relationship between money and capital markets in Nigeria. Furthermore, there is a bidirectional causality between money and capital markets in Nigeria in the study period. The study concludes that there is a complementary (positive) causal relationship between money market and capital market in Nigeria. Therefore, the need to encourage the formulation and implementation of policies geared towards greater synergy between the two markets in Nigeria.

Keywords: Capital market, Correlation, Granger causality, Money market, Stock market.

References

  1. Afiemo, O.O. (2013). The Nigerian money market. Understanding monetary policy series 27, March. Abuja: Central Bank of Nigeria.
  2. Babarinde, G.F., Gidigbi, M. O., & Abdulmajeed, T. I. (2020). Does stock market spur economic growth? Evidence from Nigeria. Review of Finance and Banking Review, 14(1).
  3. Central Bank of Nigeria. (2019). Statistical bulletin. Abuja: Author.
  4. Etale, L. M., & Ayunku, P. E. (2017). Does money market spur economic growth in Nigeria? Granger causality approach. International Journal of Development and Economic Sustainability, 5(7), 28-37.
  5. Eze, G. P., & Nera, M. (2017). Money market and economic growth in Nigeria: A causality analysis. Online Journal of Arts, Management and Social Sciences, 2(1), 140–163.
  6. Jasienė, M., & Paškevičius, A. (2009). Interrelation of money and capital markets. Economika, 88, 66-82.
  7. Kganyago, T., & Gumbo, V. (2015). An empirical study of the relationship between money market interest rates and stock market performance: Evidence from Zimbabwe (2009-2013). International Journal of Economics and Financial Issues, 5(3), 638-646.
  8. Khetsi, Q. S., & Mongale, I. P. (2015). The impact of capital markets on the economic growth in South Africa. Journal of Governance and Regulation, 4(1), 154-163.
  9. Ologunwa, O. P., & Sadibo, O. V. (2016). Capital market development and economic growth in Nigeria. FUTA Journal of Management and Technology, 1(1), 48-59.
  10. Uruakpa, P. C. (2019). Impact of money market reforms on economic growth of Nigeria:1990– 2017. Archives of Business Research, 7(SP), 122-134.

For Conference & Paper Publication​

UIJRT Publication - International Journal