TITLE:
Impact of Capital Market Performance on Economic Growth in Developing Nations: A Qualitative Approach
AUTHORS:
Umar Bello, Umaru Zubairu, Umar Abbas Ibrahim
KEYWORDS:
Capital Market Performance, Market Capitalisation, Economic Growth, Real GDP
JOURNAL NAME:
Journal of Service Science and Management,
Vol.15 No.3,
June
30,
2022
ABSTRACT: The recapitalisation of
Nigerian banks improved capital market performance and economic growth. However, economic recessions led to a decline in capital market
activities and economic growth. Therefore, this study assessed the influence of
capital market performance on economic growth in developing countries for the
period 2012 to 2022 using empirical evidence. The specific objective of the
study was to examine the impact of market capitalisation on the real gross domestic product (GDP) in developing nations. Related and relevant literature was reviewed for the
conceptual, theoretical, and empirical framework for the study. The study
employed a qualitative approach using descriptive synthesis to evaluate the results of the impact of capital
market performance on economic growth in developing countries using empirical
evidence from 2012 to 2022. The analysis revealed that 30% of empirical results
from the capital market and economic growth studies in developing nations are
not consistent with the apriori expectation. The study concludes that using
different variables and approaches for time series analysis produces
inconsistent results in developing countries. The study recommended encouraging
the financing of companies through domestic capital formation in both capital
and money markets. There is also a need for harmonising the approach for
consistency of findings in capital market research.