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STOCK MARKET CAPITALIZATION AND ECONOMIC GROWTH OF NIGERIA AND SOUTH AFRICA (2000-2018)

Abstract

The study examined a comparative study of the stock market capitalization on economic growth in Nigeria and South Africa for the period 2000-2018. The impressive growth recorded by Nigeria and South Africa Capital markets performance indicators are expected to transform their economies to the desired level. The study relies on time series OLS regression to analyze the data. The study found that the relationship between market capitalization ratio to GDP and economic growth is positive for South Africa but insignificant for Nigeria. Thus, the economic growth is positively correlated with the size of both countries’ capital markets, though the size of South Africa capital market has better contribution to economic growth compared to Nigeria. The study recommends that there is a need to increase the size of the markets in both countries by increasing the number of financial instruments available to investors so as to increase trading as well as improve liquidity in the markets. 

Key words: Stock Market, Economic growth, Market Capitalization,

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