IMPACT OF CAPITAL MARKET FINANCING ON NIGERIA’S INDUSTRIAL PERFORMANCE: An Empirical Analysis
- Afolabi E. Olowookere
- Joseph O. Ogebe
- ( paper pages. 1 - 22 )
Abstract
The capital market plays a vital role in providing long-term fundingfor businesses to expand. If this role is efficiently performed with theaim of industrialization, the industrial sector is expected to obtain therequired funds from the market for expansion. This fact has beenestablished in most developed economies. However, the low level ofindustrialization in Nigeria raises questions on whether the capitalmarket has met the expectation of providing funds to drive industrialsector growth. Employing a firm-level perspective, this studyexamined the relationship between capital market financing and theextent of industrialization of firms listed on the Nigerian StockExchange. Specific attempt was made to see if capital marketfinancing (debt and equity) contributes positively to the growth of theindustrial sector relative to other sectors in the Nigerian capitalmarket.The study employed data of all publicly-listed firms on theNigerian Stock Exchange from 1980 to 2016, with these firms furthergrouped into their relevant industries. The transcendental logarithmic(translog) production function that incorporates debt and equitiesalongside the traditional labour and capital inputs was used toexamine the impact of capital market financing on the progress ofindustrialization in Nigeria. Results from the analysis support thepositive contribution of the capital market to the progress of industrialization, and the study recommends further redirecting ofcapital market funding towards improved industrial sector growth.
Citation
Afolabi E. Olowookere, Joseph O. Ogebe.
2019.
"IMPACT OF CAPITAL MARKET FINANCING ON NIGERIA’S INDUSTRIAL PERFORMANCE: An Empirical Analysis"
The Nigerian Journal of Economic and Social Studies,
61 (1): 1 - 22.
JEL Classification
E 62, O16
