Capital Market and Economic Growth Nexus: Evidence from Nigeriaiosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
This document provides an overview of the mutual funds industry in India. It discusses the development of mutual funds in India since 1964 when the Unit Trust of India (UTI) was established. It covers the various phases of growth of the industry, including the entry of public sector funds in 1987-1993, private funds in 1993-1996, increased regulation by SEBI in 1996-1999, and continued consolidation and growth from 1999 onwards. It also provides definitions of key terms like mutual fund and discusses the typical organization structure of mutual funds including sponsors, trustees, asset management companies (AMCs), custodians etc. Overall, the document traces the history and evolution of mutual funds in India over the past several decades.
Demonetization - Impact on the Indian Financial MarketKeshin Pandit
The document summarizes a student project report on the impact of India's 2016 demonetization on its financial market. The report analyzes secondary data from the government and financial institutions to study how demonetization affected areas like the money market, stock market, banks, insurance, and more. The student found that while short-term impacts on citizens were significant, demonetization ultimately achieved the government's goals of reducing black money and increasing digital transactions.
The document provides an overview of the Indian financial system, including financial markets, intermediation, and instruments. It discusses key components of the system such as money markets, capital markets, credit markets, and foreign exchange markets. It also describes various financial intermediaries that operate in the markets, including investment bankers, underwriters, and mutual funds. The role of the Reserve Bank of India in regulating the financial system is summarized as well.
The document discusses recent developments in India's money market. It provides context on the money market and its role in facilitating short-term lending. It then summarizes that the money market has grown tremendously in India since economic reforms, with banks meeting short-term funding needs. Several reforms, like deregulating interest rates, establishing money market mutual funds and the liquidity adjustment facility, have improved the money market's functioning. Overall liquidity in the banking system remains high.
The Unit Trust of India (UTI) scam involved large-scale mismanagement and fraudulent investments by UTI managers that led to losses of thousands of crores of rupees belonging to small investors. UTI's flagship scheme US-64 was changed from debt-based to equity-linked and liberalized, allowing large-scale speculative investments in stocks like those promoted by Ketan Parekh. These collapsed, eroding over half of UTI's portfolio value within a year. The scam benefited large corporations and influential individuals but hurt millions of small investors who lost a major portion of their savings. It highlighted the need for better regulation of public savings managed by government institutions.
The presentation discusses different ways that the financial sector can contribute to economic growth. It further discusses other dependencies to economic development.
Capital Market and Economic Growth Nexus: Evidence from Nigeriaiosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
This document provides an overview of the mutual funds industry in India. It discusses the development of mutual funds in India since 1964 when the Unit Trust of India (UTI) was established. It covers the various phases of growth of the industry, including the entry of public sector funds in 1987-1993, private funds in 1993-1996, increased regulation by SEBI in 1996-1999, and continued consolidation and growth from 1999 onwards. It also provides definitions of key terms like mutual fund and discusses the typical organization structure of mutual funds including sponsors, trustees, asset management companies (AMCs), custodians etc. Overall, the document traces the history and evolution of mutual funds in India over the past several decades.
Demonetization - Impact on the Indian Financial MarketKeshin Pandit
The document summarizes a student project report on the impact of India's 2016 demonetization on its financial market. The report analyzes secondary data from the government and financial institutions to study how demonetization affected areas like the money market, stock market, banks, insurance, and more. The student found that while short-term impacts on citizens were significant, demonetization ultimately achieved the government's goals of reducing black money and increasing digital transactions.
The document provides an overview of the Indian financial system, including financial markets, intermediation, and instruments. It discusses key components of the system such as money markets, capital markets, credit markets, and foreign exchange markets. It also describes various financial intermediaries that operate in the markets, including investment bankers, underwriters, and mutual funds. The role of the Reserve Bank of India in regulating the financial system is summarized as well.
The document discusses recent developments in India's money market. It provides context on the money market and its role in facilitating short-term lending. It then summarizes that the money market has grown tremendously in India since economic reforms, with banks meeting short-term funding needs. Several reforms, like deregulating interest rates, establishing money market mutual funds and the liquidity adjustment facility, have improved the money market's functioning. Overall liquidity in the banking system remains high.
The Unit Trust of India (UTI) scam involved large-scale mismanagement and fraudulent investments by UTI managers that led to losses of thousands of crores of rupees belonging to small investors. UTI's flagship scheme US-64 was changed from debt-based to equity-linked and liberalized, allowing large-scale speculative investments in stocks like those promoted by Ketan Parekh. These collapsed, eroding over half of UTI's portfolio value within a year. The scam benefited large corporations and influential individuals but hurt millions of small investors who lost a major portion of their savings. It highlighted the need for better regulation of public savings managed by government institutions.
The presentation discusses different ways that the financial sector can contribute to economic growth. It further discusses other dependencies to economic development.
Indian economy current problems and future prospectsKulandaivelu GfK
This document provides an overview of the current state of the Indian economy and prospects for the future. It notes several paradoxes, including high fiscal deficits despite low inflation and interest rates. While the current account is in surplus and foreign reserves are high, this situation is unusual for a developing country which typically relies on capital inflows to finance domestic investment. The document compares India's economic integration and performance to China's, and argues India could experience sudden capital outflows if interest rates rise abroad. Overall it suggests the economy is in an unhealthy state and private investment may be crowded out by large government deficits.
To analyze the stock market, one must first analyze the global economy and how it affects the Indian economy. Then it is important to analyze key sectors and economic indicators like GDP growth, inflation, interest rates, forex reserves, and IIP data. Finally, one can analyze specific companies and stocks. Some important factors to examine are monetary policies, fiscal policies, FDI, FII flows, and the rupee-dollar exchange rate. Regular analysis of macroeconomic trends helps provide context for movements in the stock market.
Money Supply and its Impact on Inflation and Interest Rate: A case study of I...Gokul K Prasad
The document is a project report on analyzing the relationship between money supply, inflation, and interest rates in India from 2003-2004 to 2013-2014. It begins with an introduction to the Indian economy throughout history and currently. It then discusses money supply in India and the various measures used by the Reserve Bank of India to control money supply. Next, it covers inflation in India, how it is measured, and the relationship between money supply and inflation. Finally, it discusses interest rates in India, how they are determined, and the relationship between interest rates, money supply, and other economic factors. The report provides historical data and analysis on these economic indicators in India over the given time period.
The document summarizes the UTI scam that occurred in India involving the US-64 mutual fund scheme. It provides background on the establishment and growth of US-64 in the 1960s-1990s when its dividend rates rose to 26%. From 1995-1999, the fund's net asset value fell drastically. A panel was formed in 1999 to revamp the fund following the crisis. UTI then suspended trading of US-64 units for six months in 2001 before ending the fund in 2003 and offering investors cash or bonds. The document outlines reasons for the crisis such as non-declaration of net asset values, high dividends, investment in junk bonds, and involvement of Ketan Parekh. It also discusses the impact on investors
The document defines and describes the money market in India. It states that the money market deals with short-term lending and borrowing of funds with maturities of less than one year. It consists of various sub-markets that trade instruments like treasury bills, commercial bills, certificates of deposit, and more. The key functions of the money market are to provide parking for short-term surplus funds, enable central bank control of liquidity, and facilitate meeting short-term deficits.
This document provides an overview of the financial system and money in Egypt, with a focus on the historical development of Egypt's banking system. It discusses how Egypt's financial system consists of financial markets, institutions, and instruments, and plays an important role in economic development by facilitating investment. The banking system in Egypt underwent several phases of development, starting with the establishment of foreign-owned banks in the 1850s, a period of nationalization in the 1960s, and a move towards privatization and economic reforms beginning in the 1970s and continuing into the 1990s.
Foreign financial resources inflows and stock market development empirical ev...Alexander Decker
This study empirically investigates the effects of foreign financial resource inflows on stock market development in Nigeria and Ghana between 1988-2011 for Nigeria and 1991-2011 for Ghana. Using market capitalization to GDP ratio as a proxy for stock market development and multiple linear regression analysis, the study finds that foreign direct investment, foreign portfolio investment, personal remittances, and official development assistance were positively related to stock market development in Nigeria, though official development assistance was insignificant. In Ghana, foreign direct investment, personal remittances, and external debt were negatively related to stock market development, while official development assistance was positively related. The study aims to contribute to existing literature by investigating the effects of multiple components of foreign financial inflows on stock
This document provides an overview of the Indian financial system from 1950 to the present. It discusses the key features and developments during three periods:
1) 1950-1980: The financial system was characterized by government control and ownership of institutions to align with economic planning priorities. Specialized public institutions were established for agriculture, housing, exports, etc.
2) 1980s: More specialized development finance institutions were set up while liberalizing restrictions. The government draft on financial resources increased.
3) Post-1990s: Financial reforms accelerated liberalization and integration into the global economy. Public institutions were privatized, regulations reduced, and new private and foreign players entered the market. The role of capital markets expanded.
The document discusses formal and informal finance systems. The formal system includes licensed banks and institutions that primarily serve large businesses and governments. The informal system is unlicensed and provides savings and credit to small farmers, low-income households, and small businesses through simple and locally understood procedures. While the formal system has more resources, its complex requirements exclude many rural and poor clients, while the informal system fills this need with more accessible community-based services.
The Unit Trust of India (UTI) was established in 1964 by the government of India to promote savings from small investors and provide opportunities to benefit from India's industrialization. UTI initially had a monopoly on mutual funds in India. (first phase from 1964-1987). In the late 1980s and 1990s, other mutual funds were established but UTI remained the largest. In 2003, UTI was bifurcated into two entities, one being UTI Mutual Fund Ltd, owned by State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank.
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
This document summarizes the trajectory of India's fiscal policy over several decades. It discusses how fiscal policy evolved from a conservative approach focused on controlling deficits during early post-independence planning, to economic liberalization in 1991 that reformed the tax system. While deficits were brought under control, public debt increased in the 1980s. After the 2008 global financial crisis, India responded with countercyclical fiscal measures, and its economy is now witnessing a return to fiscal consolidation and prudence. Looking ahead, further tax reforms and better targeted social spending will be priorities.
The document provides information on the structure and schemes of UTI (Unit Trust of India). It was formed in 1963 by the Government of India to mobilize retail savings and channel them into the stock market. UTI operates without ownership capital and has an independent board of trustees. It offers various open-ended and closed-ended schemes across equity, debt, liquid and other categories to investors.
This document provides an overview of the Indian financial system. It discusses the organization and components of the Indian financial system, including the organized sector consisting of banks, financial institutions, money markets, and the unorganized sector consisting of indigenous bankers and moneylenders. The key functions of the financial system are to mobilize savings and allocate them to productive investment in order to promote economic growth. The financial system plays a critical role in facilitating trade, specialization, risk management, and efficient use of resources in the economy.
The Effects of the Global Financial Crisis on the Nigerian Stock Exchangeiosrjce
Financial Crises is a global phenomenon, a situation in which the values of financial institutions or
assets drop rapidly. It applied broadly to a variety of situations in which some financial institutions or assets
suddenly lose a large part of their values. This topic ‘The Effects of Global Financial Crises on the Nigerian
Stock Exchange tend to bring limelight the historical background, theories, causes and effects of financial crises
mostly in the country’s stock exchange. It aims of equipping the Readers, Economics and other Stakeholders in
the economics and financial sector with the right knowledge to face the challenges brought about by this ugly
phenomenon with the view of controlling and reducing its effects to the barest minimum.
Financial liberalization, Reforms carried out in India and their impact on fi...Simrankaur1022
Research paper - Introduction to financial liberalization, financial repression, benefits of financial liberalization, financial liberalization in India, MAJOR FINANCIAL SECTOR REFORMS CARRIED OUT IN INDIA SINCE 1991, OVERALL IMPACT OF THE REFORMS ON FINANCIAL SECTOR OF
INDIA SINCE 1991.
The document discusses the Indian financial system. It defines finance and explains that the financial system comprises financial institutions, markets, and infrastructure that facilitate the flow of funds from areas of surplus to deficit. The system includes various types of markets (money market, capital market, forex market, credit market), financial institutions and intermediaries, and financial products. It outlines the key components, regulations, and reforms of the Indian financial system.
This document summarizes a study examining the impact of international capital flows on the Indian stock market. The study uses daily data from 2005-2014 on the Sensex and Nifty stock indices and foreign institutional investment (FII) flows. It performs various econometric analyses including Granger causality tests and GARCH modeling to study the impact on returns and volatility. The results show no evidence of causality from capital flows to stock returns, but do find capital flows help explain volatility in the stock market, with a significant asymmetric effect of capital outflows. Robustness checks using different sub-periods are also conducted.
India has recently attracted global attention as its GDP grew faster than any other large emerging market, at 7.5 per cent in 2015 and further reforms are expected to foster even more growth opportunities.
The Indian economy, defying weakness in Asia and elsewhere in developed markets, has been on a trajectory of relatively high growth. With its large population, its diversified economy and its information technology companies, India offers an attractive investment proposition with tremendous opportunities. What are the principles guiding the Foreign Portfolio Investor (FPI) status?
Capital Market and Economic Growth in Nigeria A Causal Analysis 1987 – 2021ijtsrd
The study investigated the effect of capital market on economic growth in Nigeria. It also determined the causal relationship between capital markets on economic growth. The study covered the liberalised economic era in Nigeria starting from 1987 to 2021. The study employed new issues, market size, market liquidity, market volatility and bond market size as proxies for capital market to determine the nexus with economic growth. Data were obtained from the Central Bank of Nigeria statistical bulletin and analysed using the ARDL regression and granger causality tests. The results showed that 1 New Issues has no significant long and short run effects on economic growth but economic growth granger causes new issues, 2 Stock Market Size has a negative long run significant effect a mixed short run effect of positive in the initial period and negative in later years but no causal relationship with economic growth, 3 Stock Market liquidity has significant and positive long run and short run effects but no causal relationship with economic growth, 4 Stock Market Volatility has insignificant negative long run effect a mixed positive and then negative effect in the short run but no causal relationship with economic growth, and 5 Bond Market Size has significant and negative long run and short run effects but no causal relationship with economic growth in Nigeria. The study concluded that capital market follows the demand following hypothesis as economic growth determines one of the capital market variables new issues . The capital market size, liquidity and volatility have no causal relationship with economic growth which depicts the neutrality hypothesis that the financial market nee capital market and economic growth has no recourse to each other in development. The recommendations put forward by the study include that existing firms in Nigeria should be encouraged to assess the capital market for business financing and the need for effective supervision of stock market activities. The outcome of the study contributed immensely to new knowledge in capital market and economic growth nexus by debunking the sought after finance led theory in support that the development of the capital market should drive economic growth. Ike, Ngozi Ann | Chukwunulu, Jessie Ijeoma "Capital Market and Economic Growth in Nigeria: A Causal Analysis (1987 – 2021)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51909.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/51909/capital-market-and-economic-growth-in-nigeria-a-causal-analysis-1987-–-2021/ike-ngozi-ann
Capital Market and Economic Growth in Nigeria 1981 - 2010 Samuel Udeji
This document provides an introduction and background to a study examining the relationship between capital markets and economic growth in Nigeria. It discusses Nigeria's various development plans and the importance of finance and capital markets for economic growth. The author notes there is debate around the impact of capital markets on growth. While some research finds a positive relationship, others find negative or no relationship. The document outlines the specific objectives and hypotheses that will guide the empirical analysis in later chapters. It also provides an overview of the methodology and organization of the upcoming study.
Indian economy current problems and future prospectsKulandaivelu GfK
This document provides an overview of the current state of the Indian economy and prospects for the future. It notes several paradoxes, including high fiscal deficits despite low inflation and interest rates. While the current account is in surplus and foreign reserves are high, this situation is unusual for a developing country which typically relies on capital inflows to finance domestic investment. The document compares India's economic integration and performance to China's, and argues India could experience sudden capital outflows if interest rates rise abroad. Overall it suggests the economy is in an unhealthy state and private investment may be crowded out by large government deficits.
To analyze the stock market, one must first analyze the global economy and how it affects the Indian economy. Then it is important to analyze key sectors and economic indicators like GDP growth, inflation, interest rates, forex reserves, and IIP data. Finally, one can analyze specific companies and stocks. Some important factors to examine are monetary policies, fiscal policies, FDI, FII flows, and the rupee-dollar exchange rate. Regular analysis of macroeconomic trends helps provide context for movements in the stock market.
Money Supply and its Impact on Inflation and Interest Rate: A case study of I...Gokul K Prasad
The document is a project report on analyzing the relationship between money supply, inflation, and interest rates in India from 2003-2004 to 2013-2014. It begins with an introduction to the Indian economy throughout history and currently. It then discusses money supply in India and the various measures used by the Reserve Bank of India to control money supply. Next, it covers inflation in India, how it is measured, and the relationship between money supply and inflation. Finally, it discusses interest rates in India, how they are determined, and the relationship between interest rates, money supply, and other economic factors. The report provides historical data and analysis on these economic indicators in India over the given time period.
The document summarizes the UTI scam that occurred in India involving the US-64 mutual fund scheme. It provides background on the establishment and growth of US-64 in the 1960s-1990s when its dividend rates rose to 26%. From 1995-1999, the fund's net asset value fell drastically. A panel was formed in 1999 to revamp the fund following the crisis. UTI then suspended trading of US-64 units for six months in 2001 before ending the fund in 2003 and offering investors cash or bonds. The document outlines reasons for the crisis such as non-declaration of net asset values, high dividends, investment in junk bonds, and involvement of Ketan Parekh. It also discusses the impact on investors
The document defines and describes the money market in India. It states that the money market deals with short-term lending and borrowing of funds with maturities of less than one year. It consists of various sub-markets that trade instruments like treasury bills, commercial bills, certificates of deposit, and more. The key functions of the money market are to provide parking for short-term surplus funds, enable central bank control of liquidity, and facilitate meeting short-term deficits.
This document provides an overview of the financial system and money in Egypt, with a focus on the historical development of Egypt's banking system. It discusses how Egypt's financial system consists of financial markets, institutions, and instruments, and plays an important role in economic development by facilitating investment. The banking system in Egypt underwent several phases of development, starting with the establishment of foreign-owned banks in the 1850s, a period of nationalization in the 1960s, and a move towards privatization and economic reforms beginning in the 1970s and continuing into the 1990s.
Foreign financial resources inflows and stock market development empirical ev...Alexander Decker
This study empirically investigates the effects of foreign financial resource inflows on stock market development in Nigeria and Ghana between 1988-2011 for Nigeria and 1991-2011 for Ghana. Using market capitalization to GDP ratio as a proxy for stock market development and multiple linear regression analysis, the study finds that foreign direct investment, foreign portfolio investment, personal remittances, and official development assistance were positively related to stock market development in Nigeria, though official development assistance was insignificant. In Ghana, foreign direct investment, personal remittances, and external debt were negatively related to stock market development, while official development assistance was positively related. The study aims to contribute to existing literature by investigating the effects of multiple components of foreign financial inflows on stock
This document provides an overview of the Indian financial system from 1950 to the present. It discusses the key features and developments during three periods:
1) 1950-1980: The financial system was characterized by government control and ownership of institutions to align with economic planning priorities. Specialized public institutions were established for agriculture, housing, exports, etc.
2) 1980s: More specialized development finance institutions were set up while liberalizing restrictions. The government draft on financial resources increased.
3) Post-1990s: Financial reforms accelerated liberalization and integration into the global economy. Public institutions were privatized, regulations reduced, and new private and foreign players entered the market. The role of capital markets expanded.
The document discusses formal and informal finance systems. The formal system includes licensed banks and institutions that primarily serve large businesses and governments. The informal system is unlicensed and provides savings and credit to small farmers, low-income households, and small businesses through simple and locally understood procedures. While the formal system has more resources, its complex requirements exclude many rural and poor clients, while the informal system fills this need with more accessible community-based services.
The Unit Trust of India (UTI) was established in 1964 by the government of India to promote savings from small investors and provide opportunities to benefit from India's industrialization. UTI initially had a monopoly on mutual funds in India. (first phase from 1964-1987). In the late 1980s and 1990s, other mutual funds were established but UTI remained the largest. In 2003, UTI was bifurcated into two entities, one being UTI Mutual Fund Ltd, owned by State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank.
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
This document summarizes the trajectory of India's fiscal policy over several decades. It discusses how fiscal policy evolved from a conservative approach focused on controlling deficits during early post-independence planning, to economic liberalization in 1991 that reformed the tax system. While deficits were brought under control, public debt increased in the 1980s. After the 2008 global financial crisis, India responded with countercyclical fiscal measures, and its economy is now witnessing a return to fiscal consolidation and prudence. Looking ahead, further tax reforms and better targeted social spending will be priorities.
The document provides information on the structure and schemes of UTI (Unit Trust of India). It was formed in 1963 by the Government of India to mobilize retail savings and channel them into the stock market. UTI operates without ownership capital and has an independent board of trustees. It offers various open-ended and closed-ended schemes across equity, debt, liquid and other categories to investors.
This document provides an overview of the Indian financial system. It discusses the organization and components of the Indian financial system, including the organized sector consisting of banks, financial institutions, money markets, and the unorganized sector consisting of indigenous bankers and moneylenders. The key functions of the financial system are to mobilize savings and allocate them to productive investment in order to promote economic growth. The financial system plays a critical role in facilitating trade, specialization, risk management, and efficient use of resources in the economy.
The Effects of the Global Financial Crisis on the Nigerian Stock Exchangeiosrjce
Financial Crises is a global phenomenon, a situation in which the values of financial institutions or
assets drop rapidly. It applied broadly to a variety of situations in which some financial institutions or assets
suddenly lose a large part of their values. This topic ‘The Effects of Global Financial Crises on the Nigerian
Stock Exchange tend to bring limelight the historical background, theories, causes and effects of financial crises
mostly in the country’s stock exchange. It aims of equipping the Readers, Economics and other Stakeholders in
the economics and financial sector with the right knowledge to face the challenges brought about by this ugly
phenomenon with the view of controlling and reducing its effects to the barest minimum.
Financial liberalization, Reforms carried out in India and their impact on fi...Simrankaur1022
Research paper - Introduction to financial liberalization, financial repression, benefits of financial liberalization, financial liberalization in India, MAJOR FINANCIAL SECTOR REFORMS CARRIED OUT IN INDIA SINCE 1991, OVERALL IMPACT OF THE REFORMS ON FINANCIAL SECTOR OF
INDIA SINCE 1991.
The document discusses the Indian financial system. It defines finance and explains that the financial system comprises financial institutions, markets, and infrastructure that facilitate the flow of funds from areas of surplus to deficit. The system includes various types of markets (money market, capital market, forex market, credit market), financial institutions and intermediaries, and financial products. It outlines the key components, regulations, and reforms of the Indian financial system.
This document summarizes a study examining the impact of international capital flows on the Indian stock market. The study uses daily data from 2005-2014 on the Sensex and Nifty stock indices and foreign institutional investment (FII) flows. It performs various econometric analyses including Granger causality tests and GARCH modeling to study the impact on returns and volatility. The results show no evidence of causality from capital flows to stock returns, but do find capital flows help explain volatility in the stock market, with a significant asymmetric effect of capital outflows. Robustness checks using different sub-periods are also conducted.
India has recently attracted global attention as its GDP grew faster than any other large emerging market, at 7.5 per cent in 2015 and further reforms are expected to foster even more growth opportunities.
The Indian economy, defying weakness in Asia and elsewhere in developed markets, has been on a trajectory of relatively high growth. With its large population, its diversified economy and its information technology companies, India offers an attractive investment proposition with tremendous opportunities. What are the principles guiding the Foreign Portfolio Investor (FPI) status?
Capital Market and Economic Growth in Nigeria A Causal Analysis 1987 – 2021ijtsrd
The study investigated the effect of capital market on economic growth in Nigeria. It also determined the causal relationship between capital markets on economic growth. The study covered the liberalised economic era in Nigeria starting from 1987 to 2021. The study employed new issues, market size, market liquidity, market volatility and bond market size as proxies for capital market to determine the nexus with economic growth. Data were obtained from the Central Bank of Nigeria statistical bulletin and analysed using the ARDL regression and granger causality tests. The results showed that 1 New Issues has no significant long and short run effects on economic growth but economic growth granger causes new issues, 2 Stock Market Size has a negative long run significant effect a mixed short run effect of positive in the initial period and negative in later years but no causal relationship with economic growth, 3 Stock Market liquidity has significant and positive long run and short run effects but no causal relationship with economic growth, 4 Stock Market Volatility has insignificant negative long run effect a mixed positive and then negative effect in the short run but no causal relationship with economic growth, and 5 Bond Market Size has significant and negative long run and short run effects but no causal relationship with economic growth in Nigeria. The study concluded that capital market follows the demand following hypothesis as economic growth determines one of the capital market variables new issues . The capital market size, liquidity and volatility have no causal relationship with economic growth which depicts the neutrality hypothesis that the financial market nee capital market and economic growth has no recourse to each other in development. The recommendations put forward by the study include that existing firms in Nigeria should be encouraged to assess the capital market for business financing and the need for effective supervision of stock market activities. The outcome of the study contributed immensely to new knowledge in capital market and economic growth nexus by debunking the sought after finance led theory in support that the development of the capital market should drive economic growth. Ike, Ngozi Ann | Chukwunulu, Jessie Ijeoma "Capital Market and Economic Growth in Nigeria: A Causal Analysis (1987 – 2021)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51909.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/51909/capital-market-and-economic-growth-in-nigeria-a-causal-analysis-1987-–-2021/ike-ngozi-ann
Capital Market and Economic Growth in Nigeria 1981 - 2010 Samuel Udeji
This document provides an introduction and background to a study examining the relationship between capital markets and economic growth in Nigeria. It discusses Nigeria's various development plans and the importance of finance and capital markets for economic growth. The author notes there is debate around the impact of capital markets on growth. While some research finds a positive relationship, others find negative or no relationship. The document outlines the specific objectives and hypotheses that will guide the empirical analysis in later chapters. It also provides an overview of the methodology and organization of the upcoming study.
Modeling the effect of capital market empirical evidence from nigeria.Alexander Decker
This study examines the relationship between capital market activities and economic growth in Nigeria from 2001 to 2010. The capital market variables of annual market capitalization and total volume of transactions were analyzed in relation to gross domestic product as a proxy for economic development. The findings revealed a positive but not statistically significant relationship between capital market activities and GDP. It is recommended that building investor confidence through transparency, fair trading, political stability, and adequate publicity of the capital market could make the impact of the capital market on the economy more significant.
A comparative study of the relationship between stock price anglo99
This document discusses a comparative study of the relationship between stock price performance and firm profitability in Nigeria. It finds that firms with higher profits tend to have better stock price performance. The document provides background on the Nigerian capital market and the various products traded in the money and capital markets. It examines the historical development of the capital market in Nigeria and the reasons for its existence, which include providing alternative investment channels and fostering corporate and financial sector growth.
Macroeconomic determinants of stock market development in emerging marketsAlexander Decker
This research paper examines the macroeconomic determinants of stock market development in Kenya from 2000 to 2009. Using cointegration analysis and an error correction model, the study finds that income level, banking sector development, and stock market liquidity are important predictors of development of the Nairobi Stock Exchange. However, macroeconomic stability was not found to be a significant determinant. The paper provides background on the history and growth of the Nairobi Stock Exchange and reviews previous literature on factors that influence stock market development in emerging markets.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The document discusses the history and development of stock exchanges in India. It provides details about the National Stock Exchange of India (NSE), including its incorporation in 1992 and management structure. NSE offers a wide range of trading products across multiple markets. It has over 1,400 listed companies in its Capital Market segment and facilitates trading in derivatives like stock futures and options. The exchange has grown substantially over the years in trading volumes and market capitalization of listed companies.
A PhD THESIS ON Quot ROLE OF FOREIGN INSTITUTIONAL INVESTORS IN INDIAN STOCK...Becky Gilbert
The document provides an overview of the Indian capital market and stock market. It discusses the key participants in the capital market which include individuals, corporations, governments, banks, and financial institutions. The capital market deals with long-term financial instruments like stocks, bonds, and debentures. The history of the Indian stock market dates back to 1875 with the establishment of the Bombay Stock Exchange. Reforms since the 1990s have opened the market and brought it up to international standards. Foreign institutional investors have become major participants in the growing Indian stock market.
This document provides an overview of the Indian capital market and the role of foreign institutional investors within it. It discusses the history and development of the Indian capital market, including the establishment of the Bombay Stock Exchange in 1875. It also examines the growth of foreign capital flows into India in recent decades, as India has emerged as a lucrative destination for foreign investors due to its strong economic growth. The document aims to analyze the relationship between stock prices, foreign sector macroeconomic variables, and the efficiency of the Indian stock market.
This document provides an introduction and overview of capital markets in Nigeria. It discusses:
- The historical development of capital markets in Nigeria dating back to 1946, with the establishment of the Lagos Stock Exchange in 1961 and subsequent reforms.
- The roles and objectives of regulatory bodies like the Capital Issues Commission and Securities and Exchange Commission in developing the market and protecting investors.
- Factors that have contributed to growth in the market like government privatization initiatives and the need for further reforms to increase participation and efficiency.
- The objectives of securities regulation to provide transparency, prevent manipulation, and protect investors from unfair practices.
The Capital Market and Its Impact on Ndustrial Production in NigeriaIOSR Journals
The possession of industrial capabilities by an economy is considered an important potential for improved economic development. Indeed one of the distinguishing factors between developed and developing economies is the acquisition of industrial know-how. The emerging pattern of the institutional framework for the Nigeria which brought the capital market into existence has through the succeeding centuries continued to support the institution and justify its existence. The capital market is viewed as a major catalyst to industrial growth and indeed economic development. The benefit of appropriate industrial base for an economy lies in its combination of suitable technology management techniques and other resources in order to move the economy from a traditional and low level of production to a more automated and efficient system of mass processing and manufacture of goods and services. Unfortunately, the problem with industrial growth in Nigeria is largely due to the inability of firms to access long-term funds which the Nigerian capital marked should be providing. This unfortunately is stemmed from the fact that the Nigerian capital market has not been fully developed to adequately provide enough of such funds to the needy organizations. It was in line with the above that the study sought to determine the impact of the Nigerian capital market on the industrial sector component of the Nigerian gross domestic product, ascertain the impact of the Nigerian capital market on industrial loans issued by stock exchange and determine the impact of the Nigerian capital market on average capacity utilization rates of the Nigerian manufacturing sector. An ex-post facto research design was adopted using secondary data to determine the level of impact on the growth of the Nigerian industrial sector for the period 1990 – 2009. The ordinary least square (OLS) estimation technique was adopted using SPSS version 16.0) statistical computers software to evaluate the three objectives. The results showed (i) a positive significant impact of the market capitalization on industrial sector component of the gross domestic product and (ii) a positive significant impact of the market capitalization on average capacity utilization rates of the manufacturing sector. The result however showed (iii) a positive but non- significant impact of the annual market capitalization on industrial loans of the stock exchange. It was therefore concluded that every effort must be made by government and market operators to make the market viable and result oriented to further improve the economy
Evidence on the Dynamic Relationship between Stock Market All Share Index and...iosrjce
This study examines the dynamic relationship between Stock Market All Share Index and Gross Fixed
Capital Formation in Nigeria. Annual data on market capitalization, value of shares traded, all share index,
average prime lending rate, inflation rate, national savings and gross fixed capital formation at current
purchaser’s value from 1980 to 2012 were sourced from the statistical bulletin of the Central Bank of Nigeria
and the Nigerian Stock Exchange Fact Book various issues. The ordinary least square (OLS) regression
technique was employed in the data analysis and the error correction mechanism (ECM) was used to study the
short-run dynamics as well as long-run relationship between the stock market and gross fixed capital formation
in Nigeria. The result revealed that all share index of the Nigerian stock market has significant effect on gross
fixed capital formation. It further shows that though the capital market has the potential of influencing gross
fixed capital formation its’ effect has not been fully realized due to illiquidity and low level of development of
the Nigerian capital market. It is recommended that appropriate policy measures been taken to deepen the
market and strengthen the structure of the market to ensure that long term funds are used to finance long-term
investments.
Determinants of Emerging Capital Markets Development: A Case of Dar Es Salaam...AI Publications
This study aims to assess determinants of emerging capital markets development with particular reference to Dar es Salaam Stock Exchange (DSE). Specifically, the study aimed to analyze influence of legal and institutional framework, influence of political and macroeconomic stability and effects of broadening the investors’ base on capital markets development. The study employed time series research design. Data from statistical observations were recorded in a duration of 10 years (2011-202) on capital market development in relation to macroeconomic factors including liquidity in the stock market, investment, banking sector expansion and foreign direct investment. The regression findings correspondingly showed that the multiple determination coefficient R2 is 0.9272. The result showed that the exogenous variables (INTR, INFL, EXCHR, NINFA and LFW) are explained by 92.72% of the variations in dependent variable (CMD) while remaining 7.28 % are attributed to other factors not considered in the model are to blame. In addition, Durbin Watson (DW) statistics of 1 were disclosed in the results. The study recommends that small and medium businesses, which play a significant role in Tanzania's economy, should also be encouraged to engage in the stock market. A systematic and comprehensive investment promotion and facilitation plan that suits Tanzania's interests is required. Savings habit must be encouraged in the country by government policies that favour it. Also, as a country attracts foreign investment, more jobs become available, and individuals have more money to save. In addition, foreign direct investment adds management and technology transfer capabilities.
This document examines the relationship between capital market development and economic growth in Nigeria from 2008 to 2018. It uses market capitalization, interest rate, and inflation rate as proxies for capital market development and GDP as the measure of economic growth. Multiple regression analysis is employed to analyze the data. The results suggest that the stock market has a positive but insignificant effect on economic growth in Nigeria. It is recommended that capital market regulators be more flexible to promote innovation without compromising investor protection. The government should also improve infrastructure to create a better business environment and boost productivity and economic activity.
The document discusses the financial system in India. It defines the financial system as comprising financial markets, instruments, and intermediation. It describes the key components of the Indian financial system including money markets, capital markets, forex markets, and credit markets. It outlines the role of the financial system in facilitating flow of funds from surplus to deficit units and promoting savings and investment. It also provides an overview of the development of the financial system in India and current challenges.
An Empirical Study on the Relationship between Financial Intermediaries and E...iosrjce
The study empirically investigated the relationship between financial intermediaries and economic
growth in Nigeria. Annual time series data covering 1970 to 2013 were used to analyze the long run and short
run relationship between the development of financial intermediaries and economic growth along with the
direction of causality between the indicators. The results of the unit root test show that the variables are
integrated at I(1). Cointegration is being found between the series in the presence of a structural break in 1987,
1992 and 1996. Using bound testing technique for cointegration a stable long-run relationship was found
between the indicators of financial intermediaries and the economic growth. Error correction coefficient was
statistically significant. It was concluded that insurance premium and value of stock transaction have a positive
impact on economic growth in both short runs and long-run. However, bank credit has a negative influence on
economic growth. The causality test reveals a bi-directional relationship between bank credit and economic
growth while a unidirectional causality moves from economic growth to insurance premium and value of stock
transactions. Here remains an important policy implication for the concerned individuals of Nigeria, that is,
they have to emphasize in financial development to ignite economic growth.
This document provides an overview of the secondary market in India. It discusses how the secondary market evolved to provide liquidity to investors and companies by allowing trading of already issued securities. It describes the key functions and importance of the secondary market in price discovery, facilitating capital allocation, and encouraging savings and investment. It also summarizes major reforms that modernized the Indian secondary market, including establishment of a securities regulator, dematerialization of shares, rolling settlements, and online trading systems.
Abnormalities of hormones and inflammatory cytokines in women affected with p...Alexander Decker
Women with polycystic ovary syndrome (PCOS) have elevated levels of hormones like luteinizing hormone and testosterone, as well as higher levels of insulin and insulin resistance compared to healthy women. They also have increased levels of inflammatory markers like C-reactive protein, interleukin-6, and leptin. This study found these abnormalities in the hormones and inflammatory cytokines of women with PCOS ages 23-40, indicating that hormone imbalances associated with insulin resistance and elevated inflammatory markers may worsen infertility in women with PCOS.
A usability evaluation framework for b2 c e commerce websitesAlexander Decker
This document presents a framework for evaluating the usability of B2C e-commerce websites. It involves user testing methods like usability testing and interviews to identify usability problems in areas like navigation, design, purchasing processes, and customer service. The framework specifies goals for the evaluation, determines which website aspects to evaluate, and identifies target users. It then describes collecting data through user testing and analyzing the results to identify usability problems and suggest improvements.
A universal model for managing the marketing executives in nigerian banksAlexander Decker
This document discusses a study that aimed to synthesize motivation theories into a universal model for managing marketing executives in Nigerian banks. The study was guided by Maslow and McGregor's theories. A sample of 303 marketing executives was used. The results showed that managers will be most effective at motivating marketing executives if they consider individual needs and create challenging but attainable goals. The emerged model suggests managers should provide job satisfaction by tailoring assignments to abilities and monitoring performance with feedback. This addresses confusion faced by Nigerian bank managers in determining effective motivation strategies.
A unique common fixed point theorems in generalized dAlexander Decker
This document presents definitions and properties related to generalized D*-metric spaces and establishes some common fixed point theorems for contractive type mappings in these spaces. It begins by introducing D*-metric spaces and generalized D*-metric spaces, defines concepts like convergence and Cauchy sequences. It presents lemmas showing the uniqueness of limits in these spaces and the equivalence of different definitions of convergence. The goal of the paper is then stated as obtaining a unique common fixed point theorem for generalized D*-metric spaces.
A trends of salmonella and antibiotic resistanceAlexander Decker
This document provides a review of trends in Salmonella and antibiotic resistance. It begins with an introduction to Salmonella as a facultative anaerobe that causes nontyphoidal salmonellosis. The emergence of antimicrobial-resistant Salmonella is then discussed. The document proceeds to cover the historical perspective and classification of Salmonella, definitions of antimicrobials and antibiotic resistance, and mechanisms of antibiotic resistance in Salmonella including modification or destruction of antimicrobial agents, efflux pumps, modification of antibiotic targets, and decreased membrane permeability. Specific resistance mechanisms are discussed for several classes of antimicrobials.
A transformational generative approach towards understanding al-istifhamAlexander Decker
This document discusses a transformational-generative approach to understanding Al-Istifham, which refers to interrogative sentences in Arabic. It begins with an introduction to the origin and development of Arabic grammar. The paper then explains the theoretical framework of transformational-generative grammar that is used. Basic linguistic concepts and terms related to Arabic grammar are defined. The document analyzes how interrogative sentences in Arabic can be derived and transformed via tools from transformational-generative grammar, categorizing Al-Istifham into linguistic and literary questions.
A time series analysis of the determinants of savings in namibiaAlexander Decker
This document summarizes a study on the determinants of savings in Namibia from 1991 to 2012. It reviews previous literature on savings determinants in developing countries. The study uses time series analysis including unit root tests, cointegration, and error correction models to analyze the relationship between savings and variables like income, inflation, population growth, deposit rates, and financial deepening in Namibia. The results found inflation and income have a positive impact on savings, while population growth negatively impacts savings. Deposit rates and financial deepening were found to have no significant impact. The study reinforces previous work and emphasizes the importance of improving income levels to achieve higher savings rates in Namibia.
A therapy for physical and mental fitness of school childrenAlexander Decker
This document summarizes a study on the importance of exercise in maintaining physical and mental fitness for school children. It discusses how physical and mental fitness are developed through participation in regular physical exercises and cannot be achieved solely through classroom learning. The document outlines different types and components of fitness and argues that developing fitness should be a key objective of education systems. It recommends that schools ensure pupils engage in graded physical activities and exercises to support their overall development.
A theory of efficiency for managing the marketing executives in nigerian banksAlexander Decker
This document summarizes a study examining efficiency in managing marketing executives in Nigerian banks. The study was examined through the lenses of Kaizen theory (continuous improvement) and efficiency theory. A survey of 303 marketing executives from Nigerian banks found that management plays a key role in identifying and implementing efficiency improvements. The document recommends adopting a "3H grand strategy" to improve the heads, hearts, and hands of management and marketing executives by enhancing their knowledge, attitudes, and tools.
This document discusses evaluating the link budget for effective 900MHz GSM communication. It describes the basic parameters needed for a high-level link budget calculation, including transmitter power, antenna gains, path loss, and propagation models. Common propagation models for 900MHz that are described include Okumura model for urban areas and Hata model for urban, suburban, and open areas. Rain attenuation is also incorporated using the updated ITU model to improve communication during rainfall.
A synthetic review of contraceptive supplies in punjabAlexander Decker
This document discusses contraceptive use in Punjab, Pakistan. It begins by providing background on the benefits of family planning and contraceptive use for maternal and child health. It then analyzes contraceptive commodity data from Punjab, finding that use is still low despite efforts to improve access. The document concludes by emphasizing the need for strategies to bridge gaps and meet the unmet need for effective and affordable contraceptive methods and supplies in Punjab in order to improve health outcomes.
A synthesis of taylor’s and fayol’s management approaches for managing market...Alexander Decker
1) The document discusses synthesizing Taylor's scientific management approach and Fayol's process management approach to identify an effective way to manage marketing executives in Nigerian banks.
2) It reviews Taylor's emphasis on efficiency and breaking tasks into small parts, and Fayol's focus on developing general management principles.
3) The study administered a survey to 303 marketing executives in Nigerian banks to test if combining elements of Taylor and Fayol's approaches would help manage their performance through clear roles, accountability, and motivation. Statistical analysis supported combining the two approaches.
A survey paper on sequence pattern mining with incrementalAlexander Decker
This document summarizes four algorithms for sequential pattern mining: GSP, ISM, FreeSpan, and PrefixSpan. GSP is an Apriori-based algorithm that incorporates time constraints. ISM extends SPADE to incrementally update patterns after database changes. FreeSpan uses frequent items to recursively project databases and grow subsequences. PrefixSpan also uses projection but claims to not require candidate generation. It recursively projects databases based on short prefix patterns. The document concludes by stating the goal was to find an efficient scheme for extracting sequential patterns from transactional datasets.
A survey on live virtual machine migrations and its techniquesAlexander Decker
This document summarizes several techniques for live virtual machine migration in cloud computing. It discusses works that have proposed affinity-aware migration models to improve resource utilization, energy efficient migration approaches using storage migration and live VM migration, and a dynamic consolidation technique using migration control to avoid unnecessary migrations. The document also summarizes works that have designed methods to minimize migration downtime and network traffic, proposed a resource reservation framework for efficient migration of multiple VMs, and addressed real-time issues in live migration. Finally, it provides a table summarizing the techniques, tools used, and potential future work or gaps identified for each discussed work.
A survey on data mining and analysis in hadoop and mongo dbAlexander Decker
This document discusses data mining of big data using Hadoop and MongoDB. It provides an overview of Hadoop and MongoDB and their uses in big data analysis. Specifically, it proposes using Hadoop for distributed processing and MongoDB for data storage and input. The document reviews several related works that discuss big data analysis using these tools, as well as their capabilities for scalable data storage and mining. It aims to improve computational time and fault tolerance for big data analysis by mining data stored in Hadoop using MongoDB and MapReduce.
1. The document discusses several challenges for integrating media with cloud computing including media content convergence, scalability and expandability, finding appropriate applications, and reliability.
2. Media content convergence challenges include dealing with the heterogeneity of media types, services, networks, devices, and quality of service requirements as well as integrating technologies used by media providers and consumers.
3. Scalability and expandability challenges involve adapting to the increasing volume of media content and being able to support new media formats and outlets over time.
This document surveys trust architectures that leverage provenance in wireless sensor networks. It begins with background on provenance, which refers to the documented history or derivation of data. Provenance can be used to assess trust by providing metadata about how data was processed. The document then discusses challenges for using provenance to establish trust in wireless sensor networks, which have constraints on energy and computation. Finally, it provides background on trust, which is the subjective probability that a node will behave dependably. Trust architectures need to be lightweight to account for the constraints of wireless sensor networks.
This document discusses private equity investments in Kenya. It provides background on private equity and discusses trends in various regions. The objectives of the study discussed are to establish the extent of private equity adoption in Kenya, identify common forms of private equity utilized, and determine typical exit strategies. Private equity can involve venture capital, leveraged buyouts, or mezzanine financing. Exits allow recycling of capital into new opportunities. The document provides context on private equity globally and in developing markets like Africa to frame the goals of the study.
This document discusses a study that analyzes the financial health of the Indian logistics industry from 2005-2012 using Altman's Z-score model. The study finds that the average Z-score for selected logistics firms was in the healthy to very healthy range during the study period. The average Z-score increased from 2006 to 2010 when the Indian economy was hit by the global recession, indicating the overall performance of the Indian logistics industry was good. The document reviews previous literature on measuring financial performance and distress using ratios and Z-scores, and outlines the objectives and methodology used in the current study.
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Industrial Tech SW: Category Renewal and CreationChristian Dahlen
Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.
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Starting a business is like embarking on an unpredictable adventure. It’s a journey filled with highs and lows, victories and defeats. But what if I told you that those setbacks and failures could be the very stepping stones that lead you to fortune? Let’s explore how resilience, adaptability, and strategic thinking can transform adversity into opportunity.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
Storytelling is an incredibly valuable tool to share data and information. To get the most impact from stories there are a number of key ingredients. These are based on science and human nature. Using these elements in a story you can deliver information impactfully, ensure action and drive change.
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Digital Marketing best practices including influencer marketing, content creators, and omnichannel marketing for Sustainable Brands at the Sustainable Cosmetics Summit 2024 in New York
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This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
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The Genesis of BriansClub.cm Famous Dark WEb PlatformSabaaSudozai
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1. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
The Role of Capital Market on Economic Growth in Nigeria (1980-
2008)
Usman Owolabi Akeem, Phd
Faculty of ManagementScience,PMB4000, LAUTECH,Ogbomoso,Nigeria
e-mail-labisky@yahoo.com, Tel:+2348036675099
Abstract
The capital markets play important roles in the economy growth of the market. A well functioning market insures
that both corporation and investors get or receive fair prices for their securities. It examine the impact of capital
market on the Nigeria economy and also examine how stock exchange market has contributed to the economic
growth which aims at studying the second tier securities market. The secondary data employed for this research
work were sourced from the statistical bulletin of the Central Bank of Nigeria (CBN) 2008. The ordinary least
square is used for all variables in order to determine the linear relationship between the independent and independent
variable. Using Statistical Package for Social Sciences (SPSS). Multiple regression models were adopted in this
research work with the result from this regression model show that the R 2 for model one and two are 0.840, 0.888,
which implies that 84% and 88% variation in the dependent variable can be attributed to the variation in the
independent variable, Also R2 – ADJUSTED OF 0.799 and 0.874 implies that 79% and 87% show a minimize error
from the coefficient of determinant (R2). In conclusion, it has been observed that this ensures that valuable projects
will be financed and negative value project will be rejected. Most importantly will argue that integration into the
world capital market will accelerate the growth process.
Keywords: Market Capitalization, Inflation rate, Turnover and Real Output.
1.0 Introduction
Securities were first floated in Nigeria early as 1946, although there was no systematic and organized capital market
with all the attendant institution until the establishment of the Central Bank of Nigeria (CBN) in 1959 and the
launching of the Lagos stock exchange in 1961. Before this event, it was difficult for the government to raise fund
locally for the sale of stocks. It was difficult to mobilize adequate local savings even though the volume of such
savings was increasing. It was still more difficult to provide facilities for the government to sell part of the
increasing volume of industrial shares that it was holding through its participation in joint ventures.
As a result of the establishment of the Central Bank of Nigeria, there came into existence a wide variety of
domestic securities such as Bonds, Shares, Development stocks and premium Bonds. These were issued and offered
for sale to the public. The central Bank played a vital role in the management and marketing of government
securities, sometimes indeed the central bank act as the main holder of such securities when the market become
saturated until such securities were sold to the public mostly to those who saves the institution like the personal
fund and insurance company.
In floating the first federation of Nigeria development stock in 1959, The Central Bank attempted to
introduce arrangement for the growth of market in securities. Commercials Banks were requested to accept potential
buyers and sellers whose names where then transferred to the central Bank where central register was maintained.
The commercial Banks thus serve as a link between potential buyers and sellers. The central played the roles of
establishing price for stock sold in the market.
The Lagos stock exchange market (L SM E) was established in 1961 and since that time government stocks
started being traded on the capital market even though the central Bank started to manage the issue of government
securities. There were only nine issues of development stock between the year of 1962 and 1972 in an attempt to
increase the volume of funds available to governments in particular, the insurance, (miscellaneous provision) act
was passed in 1964. the act required insurance coy to invest locally at least tow-fifth (2/5) of the premium receives
on locally insured risk. The act stipulated as from 1 st April 1966 the investment of the insurance coy in Nigeria must
be less than the value of fund covering all endowments assurance policies dating back to 31st March, 1992. It
stipulated again that a least one quarter of their local investment must be in government securities.
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2. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
Another step at increasing the volume was taken in 1961 then the income act was passed under this acts,
the existing pension and provident funds were required to invest at least a (1/3) of their funds in Nigeria government
stock in order to continue to qualify for tax exemption.
Another important step at developing and expanding the Nigerian capital market was the indigenization decree
1972, which required that 40 of the capital of some of the foreign owned companies must be made available to
Nigerians by this single steps, many countries offered their shares to the public especially to those that have not been
listed on the Lagos stock exchange market before this decree became quoted/coated. This increase size and volume
of activities at the Lagos stock exchange both in participation and in exchange of operation.
To further increase in the number of securities quoted on the Lagos stock exchange, the federal government in its
1977/1978 budget indicated that the state government would be allowed to have their own bond. Similarly, in order
to provide funds more abundantly to certain sectors some banks were established these were:
1. The Nigeria industrial development bank (NIDB)
2. The Nigeria bank for commerce and Industrial (NBCI)
3. The federal mortgage bank formerly the Nigeria building society.
These banks are to provide long and medium term loan for investments in manufacturing agricultural,
commerce, pharmaceutical, petrochemical and real estate respectively. All these steps were taken in order to
improve and expand the scope and extent of operation of capital market in Nigeria.
1.1 Statement of the problem
The Nigeria economy has been bugged down with a lot of socio-economic and political malaise antithetical to
economic growth. Capital market in the world over serve as veritable channels to mobilize both domestic and
foreign savings for the development purpose. But despite the fact achieved by the Nigeria capital market in the area
of capital formation over the years, individuals, corporate bodies and government were yet to take full advantage of
opportunities in the markets, because they experience lack of recovery fund.
1.2 Objective of the study
The primary objective of this study:
It examines the impact of capital market on the Nigerian company economy.
Specific objectives
To examine how the stock exchange market has contributed to economic growth
It also aims at studying the objectives of second tier security market (SSM) with a view of assessing their
performance.
2.0 Theoretical Frame work
In Nigeria, experience has shown that the revenue generated from taxation and statutory allocation is not enough to
finance recurrent and capital expenditure of most state governments of the federation therefore, if is necessary for
the government to look for other avenue to source funds such as capital market for capital inflow to bridge their
growth gaps. For economic growth and development of any economy, the existence of a good financial system is
needed or necessary.
According to Oyindo (1994), financial market is a complex of institutional arrangements that facilitates the
intermediation of funds in an economy. Onyike (1984) define financial markets as the market consisting of the
money and capital market with the money market catering for short term and medium term funds needed, while the
capital market cater for long term funds needs but with its activities revolver round stock exchange.
Van (1962) sees the financial system as market which includes all institutions and procedure for brining all
sellers of financial instrument together that no matter the nature of financial instrument.
Okigbo (1998) in his own view sees financial system as a family of rules and market their transaction with
the rest of the economic domestic and oversees regulations and collection of financial arrangement institution, agent
and the mechanism whereby they relate to each other with the rest of the world.
Ojo (1998) sees financial system as a system which covers all financial institutions incuding the Central
Bank of any economy. Phillips (2001) in his own view that financial system is the complex of institution and
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3. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
mechanism whereby medium and long term fund are pooled and made available to business government and
individual thereby instrument already outstanding are transferred.
Spreacher (1987) asserted that the financial market consist of both the money and capital market and refer
to the financial market as the securities market. Unlike the earlier Keynesian liquidity preference theory, this work
recognizes the part of intermediation of credit creation both borrowed over investors in their reconsidered theory of
banking, they elaborated upon the roles of financial intermediate in saving and investor process for development.
The argued that the growth of financial asset institutions and market correspond with that of economy growth. In
this regard, Shaw and Mick in (1973) introduced the concept of ‘financial Deepening’ i.e increase in financial asses
shock in relation to GNP and develop a model to explain the complementary of financial deepening with
accumulation of physical capital through their empirical evidence from difference countries study on their economy
growth.
More specifically, High Patrick (1982) works particularly in relation to developing countries especially in
those countries where capital market are either non existence under developed or under utilized. The latter two cases
are true of the Nigerian capital market. His contention was that lack of demand for financial institution in the
developing countries is denied to factors such as excessive regulatory controls, restrictive banking legislation and
region barriers in some countries. Market distortion and imperfection this thesis was that of equation of supply led
system which could stimulate the demand of services of those financial institution in which case supply creates its
won demand while Japanese case illustrate that supply led policies could enhance public awareness as to the
advantage of the financial market and this create its own demand.
David Gill (1982) on his own part extended the thesis through inter-country analysis, comprise and observe
that monetary intermediaries such as savings and loan institutions, investment trust pension fund and security market
tend to grow as country especially on economic development and structural change from its growth and whilst the
scope of the communal system reduces he used is observation in the various segment of finance system to develop
the ‘planed approach’ while emphasizing the development of non market sources of finance such as the security
market.
In his study he discovered that in growth economy about two decades ago the banking system supply 80-
90%. The Finance originated from financial institutions against a decline about 40% unless in present times. This
pattern is being followed by developing countries. The significant of open market for primary security in developing
countries is not usual as it is a mere reflection of the low level of development and in turn per capital income, thus,
the investment saving mechanism is still rudimentary in those countries affected by growth. Studies have shown that
in the absence to open market in primary securities, the role of monetary system is intermediate and very crucial
thus, in many developing countries the banking system is depended upon to promote investment through the issue of
currency, demand deposit (DD) and time deposit (TD) which can be extended as credit to private and public
investors.
Alile (1986), subtle therefore the system can accommodate internal set off finance savings investment in
SMEs, family growth and so on. More, so when access to alternative to difficult capital market are under develop
and under utilize the lack of demand for this institutions could be due to a number of factor like excessive regulatory
controls, social cultural imperfection and distortion in the operation of market mechanism. (Falegan 1989).
2.1 Efficient Market Hypothesis
Tinic West (1980) said that capital market is characterized with divisibility that is distributing wealth
between shares and also with liquidity which is to convert asset into cash which may not be possible if the market is
not efficient. Efficiency enables investors to rate a company for higher yield and also to know the economy stands.
According to Perled (1974) said that capital market is the one in which security prices fully reflects all publicity
available information concerning securities trades such a markets is efficient in view that if properly it fulfills the
primary roles of capital market and the optimum allocation of resources.
Capital market is known to be planning the role of allocating economy’s resources overtime which will
then be regarded as allocation efficient when they establish securities prices and have operating characteristics that
encourage the economy capital to flow to individuals from the organization with the most promissory real
investments for economic growth opportunities or an efficient capital market will channel liquid capital accurately to
where it will do the nation good.
Famo (1970) put it that an efficient market hypothesis is efficient in the processing information the prices
of securities observed at anytime are based on correct evaluation of all information when firms issue securities that
represent ownership of firm activities, they can do so under the assumption that they are paying fair prices and then
became good education of values. Where there is no useful information for predicting future price change, the best
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give for tomorrow prices therefore becomes today’s price and this is called Random weak hypothesis. Random weak
hypothesis theory is used in stock price movements that are completely random and not predictable.
Efficient adherence to the random weak hypothesis (RWH) which eliminates the usefulness of part prices
information which is called the weak form of the efficiency markets hypothesis while semi-strong of the market is
that an asset is worth what the market says it worth and that market quickly and correctly evaluates all public
information related to the assets worth which are very useful to the investors. The strong form of the efficiency
capital market is that market generally anticipates the release of useful information so that insiders cannot beat the
market of information.
An insider means a chairman or managing director, secretary, company, auditors and chief executive from
buy their privilege internet to quantity in or manipulate the prices of a company’s secretary their personal gain
capital market is also operate efficient when buyers and sales of securities can purchase transact sales show at prices
that are an low as possible given the cost associated with having their sales provided. These prices at that put in time
represent the best estimate of security “intrinsic value” prices are fully reflected inform when there is an assumption
that the expected prices of a security in one period is the future, given to day’s relevant set of information is equal
today’s prices and expected return for the next period.
Kaldor and Aniwire (1961) on their own cited and agree that aggregate saving ratio depend on the
distribution of income, the larger the savings the larger the capital.
According to apostle Hayford, Alile the director general of the Nigeria stock exchange said that quotation is
one of the funding avenue open to SMEs in Nigeria since 1985. When the Nigeria stock exchange kindled the
second tier securities market (SSM).
According to apostle hayford, Alile the director general of the Nigeria stock exchange said that quotation is
one of the finding avenue open to SMEs in Nigeria since 1985. When the Nigeria stock exchange kindled the second
tier securities market (SSM).
SMEs can actually enter the Nigeria capital market to raise long term capital and for the financing of new
project expansion as modernization existing industrial and commercial concerns before the introduction of SSM the
stock.
2.2 Compositions of Capital Markets
Financial system incorporates financial instruments, financial institution, financial markets and organs
operating within the system.
The financial market can be grouped into two:
Money market and Capital market.
The capital market is may main concern which is the market for long term able funds for commercial and industry.
Different economic have many various on the forms of the markets but my emphasis will be based on
capital market.
Sharpe W.F. (1964) was of the view that for the capital market to play any significant role groups of
borrowers and inventors would come together, trading would tend to occur when lying along investment frontier
because of the interaction between borrowers and inventors which is necessary condition for a country’s take-off.
Van(1962) believed that capital market includes the credit and equity market instrument that are not
considered a part of money market. The capital has many separates markets like the market for corporate, state and
local government bonds markets for long term federal obligation and the market for equity instruments.
According to Bullion (1994) he said that it is the market the deals in long term loan able funds. The market
is the source for which industry obtain is capital from expansion and modernization and from which the gout
borrows on long term basis of development purposes. With the indefinite term of 5 years and above, loan instrument
(securities) traded in the market include equities, federal government, stock government loans, company loans,
dubieties etc.
For policy encourage savings to be accomplished suitable institutional machinery needs to be provided for
their mobilization and such mechanism is essential for the private sectors and well an useful for the government
sector to tap the available resources either to wide take a new investment or add to existing capacity.
In essence, the interactive tendency of saver and the inventers mean we the importance of a capital market.
Therefore, effectiveness of market depends on the volume of savings, the number of savers and the degree of
sophistication of the investing public.
Bervil (1973) believed that capital market replaces labour mentality in less developed counter with the catalyst
mentality by giving workers equity participation rather than increasing their wages in enterprise because equity
generates dividend and a stimulus to owning property.
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Capital market leads to economic growth only when there are enough savings and finances. Bervil also
believe that capital market also leads to development and developing countries capital market leads to economic
growth because it does not create debt and rather, it erases all loaners to economic growth.
Olaleye (1998) believes that it’s a network of financing situation that arrange for sale and purchase of long
term financial assets such as shares, debentures and mortgages. They are long term financial assets because their
claim remains for a long-term and it is divided it into two market.
1. Primary markets and
2. Secondary markets
Primary market is a market where new issue of separation such as stock and shares are sold for cash while
Secondary market is a market where the existing issued separation are bought and sold.
Ijewere (1983) argued that industries respond both to their own estimate and judgment of business to
capital market environs with efficient and dependable mechanism through where long-term financial instrument
can be raised and traded.
Schatz (1964) and Kayode (1972) maintained of capital shortage illusion thesis of Schatz’s submission
after further examinant of Schatz’s operate of federal loan board (FLS) over come period put Kayode found that
the noble was not large false demand for capital but migrate. He also argued the viability itself is a function of
object truth about the project (1981) Schatz opened that frequent capital shortage is the effective or operatory
independent of indigenous private investment is mistaken that it is a illusion created by a large false demand for
capital. He said that is a ready exists is not an immediate shortage of capital but a shortage of variable project.
In line with training, it is not intention that success since gout in requires had adopted value named at time
revising earlier, in effect at promoting economic growth.
But one of the most sustained is the maintenance of specializes economic and financial institution to provide
accelerated industrial development in Nigeria.
2.3 Roles of Economic Growth and Capital Market
Capital market as a means of providing the growth of one technique with industrialization. Other authorities are by
fiscal, external borrowing, inflationary and direct or self-finance are also important.
Many developing countries (like Nigeria) prefer combining these methods as much as possible rather than
closing from the attractive methods.
In capitalized or developed economics, the dominant and most effect techniques of industrial economics
growth are:
1. Utilizing the economic intermediaries and capital markets
2. The economic intermediation or debt asset systematic
Other methods are main fiscal, self or internal and it is predominantly used in West African Countries,
which cannot adequately cope with complexity requirement of growth in present day.
The West African countries have found it difficulty to generate high levels of savings and investments
through transaction and state enterprise profits, considering the fiscal option and it recounted into:
The accumulate of public expenditure and
The inadequate and efficient administration of both taxation system and state enterprises.
2.4 Organs of the Market
The LSC was formally known as NSE. The secondary market generating caused stock exchange and it is the prime
operational institution in the capital market.
Established in 1961 by the LSE Act, the LSE was reconstituted into the NSE in 1977 and today have seven
trading floor in Lagos, Kaduna, Port-Harcourt Kano, Onitsha, Ibadan and Abuja. Stock brokers are licensed by the
council to deal in go et al and Industrial securities quoted on the exchange and their conducts are guided by the
exchange’s rules and regulations.
The NSE was established to perform the following:
a. To provide the machinery for mobilizing the private and public saving and making them a valuable for
productive investment through stock and shares.
b. To provide meeting place for dealing member to buy and sell exactly stock and shares as were as provided
opportunities for raising new capital.
c. To facilitate the purchase and sales of security due to facilitate dealing in government securities and
provide goods with funds of development purposes.
d. To protect the public from shady deals and practice in quest securities through its rules regulation and
operating codes with the objectives of ensuring fair dealings.
2.4.1 Automation and the Nigeria Capital Market Statement
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The oxford dictionary defined automation as the use of machine to do work that was prevoluntary done by
people and also mean the loose of many factory jobs. Also the Webster’s Cambridge dictionary defined it as any
method that uses self operating equipment, electronic devices to replace human beings in doing routine of repetitive
work. In order words, automation refers to the process in which machines are used to perform tasks that are
previously require manual skill. Automation within the capital market context therefore means considerable reduce
manual execution of capital market transaction.
In addition, the following function and process have been identified as area where automation is not only
possible but also are already being practical in some developed countries.
1. Price determination process in secondary market.
2. Order execution
3. Order collection and routine
4. Market international system (MIS)
5. Clearly and settlement
6. Market surveillance system
2.4.2 Necessity for Capital Market Automation
The basic motive for promoting security market worldwide can be summarize as follows:
Firstly, to provide secondary market for trading securities, thereby improving the efficiency of capacity
allocation through price mechanism.
Secondly, to foster the mobilization of saving for the purpose of buying security issued by growth or
economic to growth.
Thirdly, provide an alternate source of review other than exact for government.
Fourth, to facilitate the form for all individual to invest their saving in a wide range of risk reward
opportunities and financing to promote rapid capital formation.
In addition to pursuing the above motives for internal growth, government has also the standard
responsibility and ensures that there is an adequate levy of protection for whoever decides to invest in the economy.
To this end, government will ensure efficient in the market, generates a high level of confidence in it assures
standard and stability in the motive mentioned earlier invest the advanced.
The question therefore, how can automation enhance realization of the broad financial objectives policy
mentioned above?
In the first instance, customer of the securities markets has the potential of improving the efficiency of the
market from the point of view of reduces operation cost. For example, automating our already identified process, viz
order collection, will reduce and processing errors that are usually associated with manual system.
The quality of market is also important of it is measure by liquidity and relative price stability. This may be
possible through timely and adequate market information. Pace, volume and company information disseminating
among market professional and investors.
Also better market integrated can be achieved as a result of automatic where there are many branches of the
same stock exchanges situated in different action or where there is independence stock exchange.
Moreover, automated securities market provides sample opportunity implementing policies that would
enhance adequate protection of investors against price regulation and negative effect of inside training. This is
automated and integrated system; market progress and training process able monitored and any unusual investment
in price of volume integrated. At this point, we must agree or identify with the system question trust that there are
two sides to a win or a similar statement that for everything that has some good aspect, it must have its P.
Carefully ugly sides, so in spite of the highlighted and developed of questions automated security market there are
some disadvantages.
2.5 Types of Market automated
A study of automated system shows that they can easily be groped into two broad categories as regards their modes.
The NAS DAW, ANO, SEAQ belongs to dealers market system in which market may continues quote
“ASK” and bid prices at which CAT and CAC system on the other hand belong to the continous action system
where order that match in term of size and price are consummated automatically. We shall briefly describe features
of the ideal market and the auction market below:
2.5.1 AUCTION MARKET SYSTEM
This system is screen based and provides for a continues price quotation based on the auction principle and public
limit order to each security. Apart from the amount and price limit on buying and selling order, the last five trade
order are consistently displayed and it makes the system more visible than the dealer market.
2.5.1.1 Market system in Nigeria
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Pricing and trading characteristics Nigeria capital market system at present, the securities are called out by an officer
of the NSE when trading commerce.
The stock brokers (dealing member) thereafter indicates their interest either abiding or offering a scanty in question
at the price the stock brokers estimate the scanty to be Act times a stock brokers may make across deal if he has both
buying and selling instruction at different of same price. The price of any stock is to a large that influence by the
basis economic principle of demand supply. Other factors both exogenous and endogenous to the economy are also
considered while determining the prices at the call over seasons.
Expected problems
In this season, we shall discuss the possibility of automating the securities transaction process in the
Nigeria net and the problem that be encountered.
a. Order collection and order routine
It involve order collected from the alternate buyers and seller and routine of same from the broker or
collector to the stock exchange given the low level of transaction in the NSE automated the processing not achieve
much.
b. Price determinant and stock exchange breach wage
2.6 Definition to SMEs
The UNE United Nations Economic for Asia (1952) defines as courtage industries of the economy that
carry on whole or partly with the help of the family, either as a whole or part store occupation such as a small scale
industry operates with hiered labour.
Bitro (1954) and (1760) India defined small scale industries as industries established, aiming fewer than 5
employees, If motive power is used and having less than 35,000 rupees of fixed capital investment.
This the central bank of Nigeria CBN (1980) in it’s credit judgment two banks, states that in the case of
commercial bank SMEs can be defined as a enterprise where annual turnover ranges between enterprise with capital
investment not exceeding N2million (exchanging cost of land) or with maximum turnover not more than 5 million.
For the Nigeria bank for commerce and industry (NBCI) in 1981/82 SSE are defined as those with total
cost of not more than N500,000 (excluding cost of land but including working capital). It also adopted the definition
of SMEs as those with cost of capital not excess of N750,000.00 and paid employment up to 50 person such
establishment must be wholly Nigeria owned that is, are companies in the schedule to of the (1977) Nigeria
enterprise promotion decree.
The centre to management development (CMD) (1982) wrote a policy proposal on small industry services
and sub mandated to Federal Government that stated follow:
“A small scale industry is manufacturing, processing or service industry located in a fasting or production types of
operations employing up to 50 full time workers.
But previously in 1974 CMD carried out a research out in Lagos and it was noted that small scale can not
be adequately define in term of number of employees sales, volume, asset employ or a combination of the above
because of inherent fallacy that would be embedded in such definition.
3.0 Research Methodology
3.1 Model specification
In the course of this study, two models will be examined. The first model will make use of real gross domestic
product as the explained variable the explanatory variables are; share index, market capitalization, turnover and
transaction at the stock exchange. The second model will make use real gross domestic product as the explained
variable while the explanatory variables are; inflation rate, transaction at the stock and exchange rate.
The model is expressed as an implicit function and as follows:
Model 1
Y = f(X1, X2, X3, X4)
Where;
Y = real gross domestic product
XI = share index
X2 = market capitalization
X3 = transaction at the stock exchange
X4 = turnover ratio
The model is being expressed in estimation form will be
Y = ßO + ß1X1 +ß2 X2 +ß4X4 +μ
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Where =
ßO intercept
ß1 = coefficient of share index
ß2 = coeffccient of market capitalization
ß3 = coefficient of transaction at the stock exchange
ß4 = coefficient of turnover ratio
μ = stochastic or error term
Model 2
RGDP = f(INF, EXR, TSE)
Where:
RGDP = real gross domestic products
INF = Inflation rate
EXR = exchange rate
TSE – transaction at the stock exchange
The model is being expressed in estimation form will be
RGDP = 0 +1 INF + 2EXR +3 TSE + μ
Where:
0 = intercept
0IINF = Coefficient of inflation
2 EXR = Coefficient of exchange rate
3 TSE = coefficient of transaction at the stock exchange
μ = stochastic error term
A priori expectation
The Expected signs of the coefficient of the first model ßO>0, ß1 > 0, ß2> 0, ß3>0, ß4 > 0.
3.2 Measurement of variable
The multiple regressor is used to anlaysed the data based on three criteria identified by koutsoyiannis (1977) They
are:
a. Economic “ a priori” criteria
b. Statistical criteria
c. Economic criteria
d. Economic “A Priori” Criteria
The statistical criteria are determine by statistical theory as stated below and are aimed at evaluating parameters of
the model they are:
Coefficient of Determination (R2)
It measures the proportion of the variation in the independent variable that is jointly explained by the linear
influence of the explanatory variable. The value of R2 lies between zero and one that is 0<R2<1.
Standard Error (SE)
This test will measure the reliability of estimated parameters the standard error is a decreasing function of the
sample size. The lower the standard error, the more reliable the estimate.
Adjusted coefficient of Determination (Adjusted R2)
The adjustment R2 is used to re-compute R2 to give another value and to take care of non-sense variables. If the R2 is
higher it is good fit but it it lower it is bad.
R2 simply implies the coefficient of determination (COD) that is adjusted for by taking into consideration the no of
explanatory variables so as to remove the effect of insignificant regressor.
Test of Significant
The t-test describes the statistical significance of the reliability in the parameters estimated. A student t-test must be
performing to determine the significant or otherwise of each explanatory variable in the model. If the value of t-
calculated is greater than the value of t-tabulated, we reject the null hypothesis (HO) and accept the alternative (H1)
3.3 Economic Criteria
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The economic criteria determine the reliability of the statistical criteria, and in particular the standard errors of the
parameter estimates.
Durbin Watson (DW)
The test will be employed to test the degree of correction. A value of DW close to 2 indicates absence of auto
correlation in disturbance. It should be noted that the d-statistic is not a satisfactory test when the explanatory
variable include a larger value of the series itself.
3.4 Sources of data
The data is gotten from statistical bulleting of the central bank of Nigeria.
3.5 Method of Analysis
The use of OLS ordinary least square and time series data shall be used for all variables over the period
3.6 Data Analysis
The data are been calculated by the SPSS software package.
MODEL 1
Variable Coefficient Std. Error t-statistics Sig
C 215781.0 16867.561 12.793 0.000
XI -2.280 0.723 -3.153 0.006
X2 960.016 119.678 8.022 0.000
X3 -7.808 1.130 -6.908 0.000
X4 25538.003 10006.760 2.552 0.021
R-Squared = 0.840
Adjusted R-squared = 0.799
Durbin - Watson statistics = 1.315
Then, Y = 215781.0 – 2.280XI + 960.016X2 – 7.808X3 +25538.003X4
MODEL 2
Variable Coefficient Std. Error t-Statistic Sig
C 190514.5 20599.392 9.242 0.000
TSE 0.172 0.033 5.914 0.000
INF 633.115 553.457 1.144 0.623
EXR 1913.603 229.104 8.353 0.000
R-Squared = 0.888
Adjusted R-Squared = 0.874
Durbin – Watson Statistics = 0.901
Then, RGDP = 0.888TSE + 0.874 + 0.901EXR
Data Interpretation
The above expression shows that the share index is positively related to the related to real GDP denoted Y. Also the
market capitalization and the transaction of stock exchange.
The R2 which is the correlation of coefficient the measures how much dependent variable (Y) that is explained by
the independent variable (X1, X2, X3, X4) is 84%, this is a good fit it shows that a total of 84% of Y is explained by
the explanatory variable X1, X2, X3, X4 and also in the second model the (RGDP) is the dependent variable that is
explained by the independent variable (TSE, INF, EXR) is 88% this is a good fit it shows that a total of 88% of
RGDP is explained by the explanatory variable X1, X2, X3, X4 from the period under consideration 1980-2008.
The R2 which is the coefficient determination is 79%, meaning that a total of Y is explained by the four variables
and the model two is 87.4% meaning that a total of RGDP is explained by the three variables.
4.0 Findings
This study has attempted to examine the various sources growth wide capital market institutions to SMEs in Nigeria.
It looks at the impact of these sources on SMEs the survival on the economy.
The following were deduced on this research works.
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1. It was observed that it is difficult for SME to expand above particular size. This is attributed to many
resources one of which is under-financed and SMEs suffer from inadequate working capital and have difficulty in
finding their purchase of materials, when payment are held the people it constitute a large part of financial payment.
2. It has also been known that equity securities sometimes known as financial plans and compos of long term
source of find such as equity share capital all these are not easy to achiever.
3. It also creates the availability of stock exchange gives the SMEs more flexible capital structure and are also
able to vary their financial status that SMEs towards the economy.
4. The findings reveal that SMEs have access to source of funds and growth. They have the ablity to raise
funds with which is easier and more successful where the firs are listed or quoted I stock exchange.
bulletin should be tied to the stock market.
5.0 Conclusion
This project has high lightened and expatiates the component of the topic, and there are several sources to this they
are share index, market capitalization, transaction at stock exchange, turnover, inflation and exchange rate. Despite
the loans disbursement to the economy. However, the growth of SMEs are hindered because of these factors;
incompetence of banks’ staff in project appraisal, loan recovery threat, inadequate equity contribution toward the
economy and high autonomous exchange rate.
These hindrances are curbed by some of this factors which are strengthening existing specialized credit scheme,
eliminating undue influence market for the economy effective project management by banks, development of
modern technologies and establishment of non-governmental organization and also the provision of guaranteed
schemes.
The available data shows the capital market are toward the economy and it’s done quickly through equities,
turnover, profit after tax industrial loan. The correlation rate of the model listed also agrees that there is high
correlation between share index, turnover, exchange rate, and inflation rate.
Lastly, all parties unanimously agrees that the concept and design of the funds is a right step in the right direction
and that all that is needed is some training on the part of the government to adjustment operations of financial
institution to the peculiarities of the Nigerian economy climate.
Table i:Data from CBN statistical bulletin
YEAR REAL SHARE MARKET TRANSACTION AT TUROVER INFLATION EXCHANGE
GDP INDEX CAPITALIZA THE STOCK
TION BILLION EXCHANGE
1980 31548.8 - - 388.7 0.51 10.00 0.5445
1981 205222.1 - 5.0 304.8 0.32 21.42 0.6369
1982 1999685.3 - 5.0 215.0 0.85 7.16 0.6702
1983 185598.1 - 5.7 397.9 0.58 23.22 0.7486
1984 183563.0 - 5.5 256.5 0.47 40.71 0.8083
1985 201036.3 1413.4 6.6 316.6 0.51 4.67 0.9996
1986 205971.4 1797.8 6.8 497.9 0.6 5.39 3.3166
1987 204806.5 2123 8.2 382.4 0.68 10.18 4.1916
1988 219875.6 2418.9 10.2 550.3 0.44 56.04 5.3530
1989 238729.6 3286.4 12.8 610.3 0.28 50.47 7.6500
1990 267550.0 5083.9 16.3 225.4 0.72 7.50 9.0001
1991 265379.1 8089.4 23.1 242.1 0.6 12.70 9.7545
1992 271365.5 11172.2 31.2 491.7 1.1 44.81 19.6609
1993 27483.3 14749.3 47.5 804.4 0.8 57.17 22.6309
1994 275450.6 22958.7 66.3 985.9 0.9 57.03 21.8861
1995 281407.4 45781.4 180.4 1838.8 1.02 72.81 21.8861
1996 293745.4 71461.7 285.8 6979.6 2.5 29.29 21.8861
1997 302022.5 91663.1 281.9 10330.5 3.9 10.67 21.8861
1998 310890.1 71542.3 262.6 13571.1 5.2 7.86 21.8861
19993 12183.5 63170.3 262.6 13571.1 5.2 7.86 21.8860
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1999 312183.5 63170.3 300.0 14072.0 4.1 6.62 92.5284
2000 329178.7 80414.1 472.3 28153.1 5.9 6.94 109.5500
2001 356994.3 122170.9 662.5 576833.8 8.9 18.87 112.4864
2002 43320.5 139582.4 764.9 59406.7 7.9 12.89 126.4000
2003 47953.0 186718.7 1359. 120402.6 8.6 14.0 135.4067
2004 527576.0 296863.8 2112.5 225820.0 11.6 15.01 132.6700
2005. 561931.4 274520.6 2900.1 26295.0 10.1 17.85 130.4000
2006 595821.6 337219 5121.0 470253.4 N.A 8.24 128.700
2007 634251.4 585279.7 13294.6 1076020.4 N.A 5.38 124.7451
2008 674889.0 610418.13 9516.2 1679138.1 N.A 11.60 119.7925
SOURCES: THE CENTRAL BANK OF NIGERIA STATISIAL BULLETING
Table ii: Regression results
ANOVAb
Model Sum of Squares Df Mean Square F Sig.
1.Regression 1.9E +011 4 4.814E+010 20.934 .000a
Residual 3.7E + 010 16 2299533912
Total 2. 3E+011 20
a. Predictor: (Constant), X4, X3, X1, X2)
b. Dependent Variable: Y
c.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error t Sig.
1. (Constant ) 215781.0 1686.561 12.793 .000
X1 -2.280 .723 -1.876 -3.153 .006
X2 960.016 119.678 6.870 8.022 .000
X3 -7.808 1.130 -5.453 -6.9022 .000
X4 25538.003 10006.760 .893 2.552 .021
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 100015.14 578954.9 292668.7 98119.71526 21
Residual -87537.7 104986.3 .0000 42890.87467 21
Std. Predicted -1.963 2.2918 .000 1.000 21
Value
Std. Residual -1.825 2.189 .000 .894 21
a. Dependent Variable: Y
Model Summaryb
Model R R Square Adjusted R Std. Error of the Durbin Watson
Square Estimate
1. .942a .888 .874 54466.06630 .901
a. Predators: (Constant), EXR, INF, TSE
b. Dependent Variable: RGDP
ANOVAb
45
12. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
Model Sum of Df Mean Square F Sig.
Squares
1. Regression 1.9E+011 4 4.814 +010 20.934 .000a
Residual 3.7E+010 16 2299533912
Total 2.3E+011 20
A. Predictor: (Constant), X4, X3, X1, X2
B. Dependent Variable Y
Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficient
B Std. Error
1. (Constant) 190514.5 20599.392 9.249 .000
TSE .172 .033 .412 5.194 .000
INF 633.115 553.457 .081 1.144 .263
EXR 1913.603 229.104 .681 8.353 .000
a. Dependent Variable: RGDP
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 195438.5 716644.8 321525.6 144820.19045 29
Residual -166406 72718.98 .00000 51465.59511 29
Std. Predicted -.871 2.728 .000 1.000 29
-3.055 1.335 .000 .945 29
a. Dependent Variable: RGDP
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13. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 2, No 3, 2011
3 Akingbehin S.S., ‘The role of capital market, paper derived at financial institution
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