Empirical Analysis Of Stock Marketgrowth And Its Effect On Agricultural Sector Performance In Nigeria (1990-2018)
Andabai Priye Werigbelegha Ph.D
Department of Banking and Finance, Niger Delta University, Bayelsa State
MaryAnn Nwamaka Igbodika PhD
Department of banking and Finance, Chukwuemaka OdumegwuOjukwu University, Igbariam Campus, Anambra State
Keywords: Stock Market Growth, Agricultural Sector, Performance, Nigeria.
Abstract
The study examined the empirical analysis of stock market growth and its effect on agricultural sector performance in Nigeria; for a period of 29 years 1990-2018. Secondary data were used and collected from the Central Bank of Nigeria Statistical Bulletin. The study employed agricultural sector output as proxy for agricultural sector performance and used as the dependent variable; whereas, New Issues, All Share Index and Market Capitalization were used as independent variables to measure stock market growth. Hypotheses were formulated and tested using time series econometric techniques. The study revealed a positive significant effect of market capitalization on agricultural sector output in Nigeria. All-Share-Index had a significant effect of agricultural sector output in Nigeria. New issues had a significant effect on agricultural sector output in Nigeria. There was a long-run equilibrium effect of stock market growth on agricultural sector performance in Nigeria; and, the result confirmed about 70% short-run adjustment speed from long-run disequilibrium. The coefficient of determination indicated that about 65% of the variations in agricultural sector performance can be explained by changes in stock market growth variables (MCP,ASI, NEI) in Nigeria. The study concluded that stock market growth had a significant effect on agricultural sector performance in Nigeria. The study thus recommended that the regulatory authority should find a means of relaxing some of the requirements to accommodates agricultural sector and enable the market more vibrant in the business of intermediation. Sensitization programmes should be put in place in educating the investors in the agricultural sector on the activities of the stock market. Government and the stake holders should have a good working relationship in order to ensure effective growth and development of the market and also discouraged them to invest in the agricultural sector