Title: Oil price, macroeconomic environment and stock market performance in an oil-exporting country: evidence from Nigeria

Authors: Chinazaekpere Nwani; Chijioke Okogbue

Addresses: Department of Economics, Banking and Finance, Gregory University Uturu, P.M.B. 1012, Uturu Abia State, Nigeria ' Department of Economics, University of Nigeria Nsukka, P.M.B. 14, Nsukka, Enugu State, Nigeria

Abstract: This study examines the dynamic interaction between indicators of macroeconomic environment, oil price and stock market performance in Nigeria from 1985 to 2014 using the autoregressive distributed lag (ARDL) bounds testing approach to cointegration analysis. The results suggest the existence of a long-run equilibrium relationship between indicators of macroeconomic environment, oil price and stock market performance in Nigeria. Stock market performance is found to be significantly related to movements in oil price in the long-run as well as in the short-run. The long-run influence of oil price on the Nigerian macroeconomic environment is found to be stronger than the short-run effect with all the indicators of the macroeconomic environment (exchange rate, inflation rate and broad money supply) responding significantly to oil price in the long-run.

Keywords: oil price; macroeconomic environment; Nigerian stock market; exchange rate; inflation rate; broad money (M2) supply; ARDL-bounds testing approach.

DOI: 10.1504/IJMEF.2017.084212

International Journal of Monetary Economics and Finance, 2017 Vol.10 No.2, pp.206 - 223

Received: 01 Sep 2015
Accepted: 25 Feb 2016
Published online: 21 May 2017 *

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