Implications Of Stock Market Efficiency On Nigerian Manufacturing Sector Performance 1985 To 2017

Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) March 2018 Vol. 8(2), pp 016-024

Original Research Articles

Implications Of Stock Market Efficiency On Nigerian Manufacturing Sector Performance 1985 To 2017

¹Dr. Ini Solomon Udom And ²Dr. Eze Onyekachi Richard

¹MacroView Consulting Limited, Abuja Nigeria.

²Department of Banking & Finance, Ebonyi State University, Abakaliki.

Corresponding author Email: ezerich2014@gmail.com

Accepted 24 March 2019

Abstract

This study sought to investigate the implications of stock market efficiency on the performance of Nigeria manufacturing sector. The study adopted the ex-post facto research design and regression analysis as methodology. Annual time series data for a 32-year period, 1985-2017, were collected from Central Bank of Nigeria Statistical Bulletin, Stock Exchange Fact Book and World Bank Handbook of Statistics for the period. Descriptive statistics and graphs were also used to complement the regression result. The result from the study found that the stock market efficiency (ASI) has a negative and significant implications on the performance of Nigerian manufacturing sector (coefficient of ASI = -0.310838; t-value = 2.801903; p-value = 0.0001 ˃ 0.05). The implication of this is that the variables (stock market efficiency, Inflation Rate, Exchange Rate and Interest Rate) are the major variables that determine how stock market efficiency affects the performance of Nigerian manufacturing sector. These variables have been used over time in Nigeria, yet the country’s manufacturing sector performance suffers from low output, high unemployment rate, and economic instability compared with other emerging economies in the World. We, therefore, recommend that since stock market efficiency variable (ASI) in this study shows negative and significant, it is therefore pertinent to recommend that the mechanism for registration and valuation of shares in the stock exchange should be improved. The prices of equities quoted on the stock market should be made to reflect as much as possible the underlying economic fundamentals of the firms. This will assist in computing a more accurate size for the stock market in Nigeria and enable the market to respond appropriately to economic developments.
Keywords: Efficiency, ASI, Industrial Development, Performance, Growth.