Impact of Capital Market on growth of the Manufacturing Sector in Nigeria

The study examined the impact of Capital Market on the Growth of Manufacturing Sector in Nigeria. Time series data was used. Due to the nature of the data, they were subjected to various tests such as unit root, co-integration and Granger causality tests. The study adopted is error correction mechanism technique to in thesetimation of the model. The regression result shows that the R2 is about 0.87 implying that the independent variables has explained about 85% of the variations in dependent variable. The Durbin Watson statistics is 1.9 which indicates a little presence of Auto correlation. The result further revealed that the coefficients of market capitalization and total new issue were negatively signed and statistical significant of 5% level of significance but the coefficient of value of capital transaction shows positive sign and statistical significant at 5% level of significance. This shows that value of capital transaction has positive and strong influence on manufacturing sector output within the time under review. The co-integration result revealed that there exist long-run relationship between manufacturing output and market capitalization. Also the result revealed that there was unidirectional causality between manufacturing sector output and capital market capitalization. Therefore, it is recommended among others that monetary authorities should supervise the capital market effectively to ensure the growth of manufacturing sector in Nigeria.