ABSTRACT

 This study examined the impact of capital market structure on economic growth in Nigeria for the period of 1981- 2018. The objectives· of the study were to verify the extent to which capital market variables contributes to economic growth. The methodology adopted for this research study is the Ordinary Least Square (OLS). The study adopted time series econometrics analysis to determine the impact of capital market on economic growth in Nigeria. Advanced econometric technique were used such as; the unit root, cointegration, vector error correction model (VECM), in which changes in GDP was regressed on market capitalization (MCAP), All Share Index (ASI), and Value for New Shares (VNSR).The result of our unit root showed that all the variables were stationary at first difference. The cointegration test showed that there was one cointegrating vector;this necessitated the application of vector error correction model,the result from the VECM revealed that the variables were statistically significant, however, ASI had negative impact, while MCAP and VNSR had positive impact. The Rwas 0.87, showing that 87% of the changes in GDP was caused by changes in the explanatory variables. The f-statistics was statistically significant meaning that the explanatory variables had joint influence on GDP. The Durbin-Watson and Breusch-Godfrey Serial Correlation LM testshowed that there is no autocorrelation in the series. Based on the findings above, the study recommends that there should be pursuit of policies that would improve the depth and breadth of the Nigerian capital market so as to engender a rapid development of the market that would result in the economic growth and development of the economy