Stock Market Development and Economic Growth in Nigeria： Market Size Versus Liquidity.doc

Stock Market Development and Economic Growth in Nigeria： Market Size Versus Liquidity 　　Abstract 　　To　the　acclaimed　positive　role　played　by　stock　markets　in　driving　growth，　with　evidence　from　the　Nigerian　stock　market.　Utilizing　several　econometric　techniques，　such　as　unit　root　test，　cointegration　test　and　Gran=ponents：　Stock　market　size　and　stock　market　liquidity.　The　essence　is　to　know　the　aspect　of　stock　market　development　that　is　the　main　driver　of　growth　in　Nigeria.　The　findings　suggest　the　dominance　of　stock　market　liquidity　over　market　size.　Wing　more　from　stock　market　liquidity，　market　size　is　found　to　have　little　or　no　effect　on　growth.　Equally　the　results　suggest　a　one　way　causation　between　financial　deepening　and　growth　with　causality　flowing　from　financial　depending　to　economic　growth. 　　Key　words：　Stock　market　size；　Liquidity；　Economic　growth；　Causality；　Nigeria 　　Okey　O.　Ovat　（2012）.　Stock　Market　Development　and　Economic　Growth　in　Nigeria：　Market　Size　Versus　Liquidity.　Canadian　Social　Science，　8（5），　-0.　Available　from　http：///index.php/css/article/view/j.css.1923669720120805.549　DOI：　http：///10.3968/j.css.1923669720120805.549. 　　introduction 　　It　is　widely　acclaimed　by　development　economists　and　policy　makers　that　a　well　developed　stock　market　is　crucial　for　the　mobilization　of　financial　resources　for　long　term　investment　and　thus　constitutes　one　of　the　major　pillars　of　economic　growth.　In　principle，　panies　to　raise　capital　at　lower　cost.　Cpanies　there　by　making　them　less　dependent　on　bank　financing，　which　in　turn　mitigate　the　risk　of　credit　crunch.　In　this　way，　viding　avenues　for　firms　financing　（Levine　　Zervos，　1998）. 　　In　recognition　of　the　acclaimed　catalytic　impact　of　developed　stock　markets　on　economic　growth，　a　plethora　of　studies　now　focus　on　the　relationship　between　stock　market　development　and　economic　growth.　Svide　only　a　broad　--　brush　picture　of　the　relationship　between　stock　market　development　and　growth　without　sorting　out　cou