Stock market development and the performance of the manufacturing sector in Nigeria

The study investigated the relationship between stock market development and the performance of the manufacturing sector in Nigeria from 1986 to 2019. The study used Structural Vector Autoregressive (SVAR) model and found that stock market development indicators namely, market capitalization, stock market liquidity and total new issues have positive impact on the manufacturing output both in the short and long-run in Nigeria. This means that if the stock market is efficient in its operations, manufacturing firms can raise long term capital for investment. The implication of this is that conscious efforts should be made to make the Nigerian Stock Exchange Market efficient so that manufacturing firms can raise long term funds for investment. This will immensely help the economy to achieve its diversification quest via the Economic Recovery and Growth Plan (ERGP). Also, improving manufacturing productivity will immensely benefit the economy following the signing of the African Continental Free Trade Area Agreement. This is because the manufacturing output will form the export base for the Nigerian economy.