Responsiveness of Capital Market Performance to Foreign Direct Investment in Nigeria, 1985-2019

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9 December (2019).pdf (1.55 MB)

Date

2019-12-09

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Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi

Abstract

The broad objectives of this study was to examine the responsiveness of capital market performance to foreign direct investment in Nigeria, 1985-2019. Specifically the study sought to measure the impact of foreign direct investment on total market capitalization in Nigeria, investigate the effect of foreign direct investment on stock market value in Nigeria, determine impact of foreign direct investment on all share index in Nigeria, evaluate the causal relationship existing between foreign direct investment and total market capitalization in Nigeria and to find out the direction of causality existing between foreign direct investment and stock market value. The study adopted multiple regression analysis. The result of OLS reveals that foreign direct investment impacted positively but not significantly on total market capitalization in Nigeria, foreign direct investment affected positively but not significantly on stock market value in Nigeria. Analysis of pair wise granger causality result reveals that there is no causality existing between foreign direct investment and total market capitalization in Nigeria. Unidirectional causality existed between foreign direct investment and all share indexes in Nigeria. Bidirectional causality existed between foreign direct investment and stock market value in Nigeria. The study recommended that the nexus between foreign direct investment and capital market performance are needed to be effectively harnessed by eliminating investments bottleneck in Nigeria.

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Keywords

All share index, Market capitalization, foreign direct investment, Capital market, performance

Citation

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https://keffi.nsuk.edu.ng/handle/20.500.14448/745

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