Title: Responsiveness of capital market development to manufacturing sector performance in Nigeria

Authors: Josaphat U.J. Onwumere; O. Aigbodioh Cyprian; Chi Aloysius Ngong; Chinyere C. Onyejiaku; Shedrack Moguluwa

Addresses: Department of Banking and Finance, University of Nigeria, Enugu Campus, Nigeria ' Department of Banking and Finance, University of Nigeria, Enugu Campus, Nigeria ' Department of Accounting, University of Bamenda, Cameroon ' Department of Management, University of Nigeria, Enugu Campus, Nigeria ' Department of Marketing, University of Nigeria, Enugu Campus, Nigeria

Abstract: This study evaluates the responsiveness of capital market development to the manufacturing sector's performance in Nigeria from 1985 to 2020. Market capitalisation, the value of transactions, and turnover ratio were used. The manufacturing value-added measures manufacturing sector performance. The vector error correction model technique was employed. The result revealed a long-run relationship between capital market development and the manufacturing sector's performance. Market capitalisation, the value of transactions, and turnover ratio positively and significantly affect the manufacturing sector's performance. This implies the indicators influenced and respond to the direction of the manufacturing sector's performance. The government should encourage savings mobilisation and investments in the capital market by implementing policies that promote capital market financing. The government should apply policies that motivate manufacturing industries to obtain funds from the stock market to boost performance. The governments should promote stock market development such that the ratio of companies' turnover should boost the manufacturing sector's performance by facilitating the extensive documentation and bottlenecks in the stock market listing and issue procedures. The Security and Exchange Commission should implement regulations that improve market capitalisation, the value of transactions, and turnover ratio to promote manufacturing sector performance.

Keywords: capital market development; performance; manufacturing sector; vector error correction model; VECM; Nigeria.

DOI: 10.1504/IJBCG.2023.135801

International Journal of Business Competition and Growth, 2023 Vol.8 No.3, pp.185 - 201

Received: 16 May 2023
Accepted: 02 Jun 2023
Published online: 05 Jan 2024 *