Global Advanced Research Journal of Management and Business Studies (GARJMBS) ISSN: 2315-5086 November 2012 Vol. 1(10), pp 375-383
Copyright © 2012 Global Advanced Research Journals
Original Research Articles
Stock Prices, Stock Market Operations and Nigerian Economic Growth: A Granger Causality Modelling
Lawal, Nurudeen Abiodun1 and Okunola, Oluniyi Elisha2
Tai Solarin University of Education, Department of Economics, Ijebu-Ode, Ogun State.
Corresponding author Email: firstname.lastname@example.org
Accepted 26 November 2012
This study examined stock prices, stock market operations and economic growth in Nigeria using time series from 1980-2010 with the adoption of granger causality modelling to test the direction of granger relationship among the variables. Augmented Dickey Fuller methodology was adapted to test for the stationary of the data used and error correction modelling was adopted. The study showed that the present value of stock price adjust rapidly to changes in interest rate, inflation rate, exchange rate, broad money supply, gross domestic product, market capitalisation and volume of transaction of the Nigeria stock exchange. The lagged value of Error correction model given as 23.9% indicates a feedback of or an adjustment of 23.9% from the previous period disequilibrium of the present level of stock price in the determination of causality between the past level of stock price and the present and past level of the explanatory variables. The study concluded that the activities of the stock market are statistically significant with the stock prices and economic growth. It is recommended that stock prices should be monitored as to prevent volatility in the prices which could drastically affects the performance of the stock exchange market.
Keywords: Stock Price, Stock Market Operations, Economic Growth
- Lawa Nurudeen Abiodun on Google Scholar
- Lawa Nurudeen Abiodun on Pubmed
- Okunola Oluniyi Elisha on Google Scholar
- Okunola Oluniyi Elisha on Pubmed