ABSTRACT

 It is a known fact that the investment that promotes economic growth and development requires long term capital funding. Thus, the efficient allocation of capital resources is vital for increased growth and development of the entire economy. However, the Nigerian Stock Exchange (NSN). in its mission statement has always emphasized its intention to promote increased capital formation in Nigeria. Therefore, this study explored the role of the Nigerian Stock Exchange on capital formation in Nigeria. It made a critical evaluation of the impact of the NSE on formation and efficient allocation of capital fund required for economic growth and development. To achieve this objective, Ordinary Least Squares (OLS) regression was employed using the data from secondary sources (199010 2004). Emperical result showed a weak positive influence of indicators of efficient Stock Exchange performance on capital formation in Nigeria. Therefore, the research study recommends sustained effort to stimulate productivity in both the public and private sector; deregulation of stock prices; review downward of the cost of raising fund in the Nigeria Stock market; internationalization of the NSE; and formulation of legislation that facilitates NSE on its contribution on capital formation geared toward economic growth and development. This study shall consist of' five chapters. Chapter one which is the introductory part contains the background of the study; the statement of the research problem: objectives of the study: research hypothesis: definition of terms, among others. Chapter two will be dedicated to the literature review. The methodology analysis will be examined in chapter three. This will also include models specification. Data presentation, analysis and interpretation will be covered in chapter four. While the concluding part of the research work will be chapter five where the summary. conclusion and recommendation will be discussed.