EFFECT OF STOCK MARKET LIQUIDITY ON MANUFACTURING SECTOR OUTPUT IN NIGERIA

The study examines the effect of stock market liquidity on the output of manufacturing sector in Nigeria from 1986-2018 using the methodology of error correction model. The study specifically analyses the effect of stock market capitalization on manufacturing sector output in Nigeria. Data was sourced using the secondary methods of data collection. The data was obtained from published sources and these published sources include data from text book, Central Bank publications, statistical bulletin, journals, magazines, newspapers, internet and other relevant publications. Findings from the study showed that the all share index has an insignificant effect on manufacturing sector output in Nigeria. In addition, the study revealed that stock market capitalisation has no significant effect on manufacturing sector output in Nigeria in the period under the study. However, values of stock transaction were found to have significant effects on the growth of manufacturing sector in Nigeria. The implication of this result is that the Nigerian stock market value transaction has witnessed tremendous changes over the years, particularly in terms of the number of operators and the public instruments traded. The study recommends that government should as a matter of fact; intensify efforts in promoting stock market activities in the economy as that will provide more liquidity needed for investments thereby leading to improved capacity of the manufacturing sector. A further recommendation is that public efforts should made for improved share index, increased stock market capitalization and improved value of stock traded for sustainable long term finance of manufacturing sector.