Stock market performance and economic growth: empirical evidence from Nigeria employing the ARDL approach

Economic growth is essential for individuals, societies, and nations due to its positive impact on well-being and development. Therefore, this study investigates the impact of stock market performance on Nigeria’s economic growth over the period spanning from 1985 to 2021, employing the Autoregressive Distributed Lag (ARDL) model. Market capitalization, total value of transactions, and all share index are the proxies for stock market performance, while gross domestic product is the proxy for economic growth. The findings are summarized as follows: (i) The bounds test showed evidence of long-term connection. (ii) In the long-run, the impact of market capitalization and total value of transactions on gross domestic product is positive, while the effect of all share index is negative. (iii) In the short-term, market capitalization and all share index spur gross domestic product, while the impact of total value of transactions is negative. Hence, the government should create an environment that fosters a positive stock market performance and gross domestic product association.