Abstract:

This research examined the influence of the Nigerian stock market on the broader economic development of the nation, beyond Gross Domestic Product (GDP) expansion. Employing annual time-series data from 2003-2022, the research examined how specific stock market indicators such as market capitalization, liquidity, and volatility influenced comprehensive development metrics encompassing real GDP per capita and the UN Human Development Index (HDI). Multiple regression analyses (OLS) were adopted as the estimation technique. The findings showed that market capitalization positively and significantly impacted economic development. However, the effects of stock market liquidity were varied, showcasing an insignificant impact on GDP per capita yet a significant negative impact on human development. Stock market volatility, on the other hand, showed insignificant implications on both GDP per capita and human development. Consequently, the study concluded that market capitalization and liquidity are the major drivers of economic development in Nigeria. Therefore, the study recommended that deliberate measures should be put in place to further open the market and make it more attractive to investors because of its ability to improve the well-being of the citizens.