Fiscal Policy and Stock Market Development in an Emerging West African Economy

Finance & Economics Review

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Field Value
 
Title Fiscal Policy and Stock Market Development in an Emerging West African Economy
 
Creator Nwakobi, Dr. Paschal Chikwado
Ananwude, Amalachukwu
Umezurike, Chinedu Maurice
 
Subject Fiscal Deficit; Government Revenue; All Share Index; Market Capitalization Ratio, Value of Stock Traded Ratio; Turnover Ratio
 
Description Purpose: This article presents a study on the effect of fiscal policy on stock market development in an emerging West African economy with an emphasis on Nigeria for the period of 1986 to 2018. Specifically, we evaluated the effect of fiscal deficit on all share index including government total expenditure on market capitalization ratio, the value of stock traded, and turnover ratio using data from the Central Bank of Nigeria (CBN) and Nigerian Stock Exchange (NSE).
Methods: The Auto-regressive Distributive Lag (ARDL) was the estimation technique employed in ascertaining the nature of the short-run relationship between fiscal policy and stock market development indices, whereas the effect of fiscal policy on stock market development was actualized under the granger causality analysis.
Results: The result of the analysis revealed that fiscal deficit has no significant effect on all share index; government total expenditure has no significant effect on stock market capitalization ratio; government total expenditure has a significant effect on the value of stock traded ratio; government total expenditure has no significant effect on the stock market turnover ratio.
Implication: Government should implement its fiscal policies to carefully accommodate the development of the stock market, as changes in fiscal policy affect the overall activities in the market and ultimately the economy.
 
Publisher Research & Innovation Initiative
 
Date 2020-10-07
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://riiopenjournals.com/index.php/finance-economics-review/article/view/182
10.38157/finance-economics-review.v2i3.182
 
Source Finance & Economics Review; Vol 2 No 3 (2020): Finance & Economics Review; 52-68
2690-4063
10.38157/finance-economics-review.v2i3
 
Language eng
 
Relation https://riiopenjournals.com/index.php/finance-economics-review/article/view/182/82
 
Rights Copyright (c) 2020 Dr. Paschal Chikwado Nwakobi, Amalachukwu Ananwude, Chinedu Maurice Umezurike
http://creativecommons.org/licenses/by-nc-nd/4.0
 

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