Stock Market-Based Financial Development and Economic Growth with Reference To Nigeria: A Review of Literature

Abstract

The objective of this paper is to survey the theoretical as well as the empirical literature review of the stock-market based financial development and economic growth in Nigeria. To the authors’ best knowledge, this is the first comprehensive empirical literature review on the relationship between stock market development and economic growth in Nigeria. The study analyzes the empirical work from 1997 to 2014. Within this time frame, the authors reviewed over 50 articles from different academic journals. Most of the empirical studies employ ordinary least square and vector error correction regression model in their methodology. However, Nigerian macroeconomic environment experiences some structural changes. Nearly all of the reviewed works did not use an econometric method that employed structural breaks or dummy variables, in considering the structural changes in the financial time series data. This omission may lead to spurious or biased results. For further study the paper, therefore, suggests the use of a structural break or dummy variables in the econometric analysis