iarjbmIARJBMIARJBM2708-5147https://doi.org/10.47310/iarjbm.2021.v02i01.046Stock Market Performance and Economic Growth in NigeriaAjayiOluwaseyi MosesAlaketuAkeem AbidemiAgunOluwafunmilayo OyenikeDepartment Of Banking And Finance, School Of Business Studies,The Federal Polytechnic, Ado-Ekiti, Ekiti-State, NigeriaThis study examined Stock Market Performance and Economic Growth in Nigeria. The model used for the study is adapted in line with the study of Josiah, Adediran and Akpeti [1]. In line with the objectives of this study, two models are specified. The first is to examine the impact of stock market capitalization on economic growth, while the second is to examine the effect of stock market capitalization volatility on economic growth. Concerning the effect of stock market volatility on economic growth, the findings show that a negative relationship exists between stock market volatility and present level of GDP, only in the first lagged period. In order word, stock market volatility of previous one month exerts a negative influence on the present level of economic growth.  The finding of this study is that as the number of lagged periods increase, the effect of stock market volatility of economic growth dies out. In the first lagged period, the effect is negative and significant at 1%. In the second lagged period, the effect is significant at 10%. Beyond the second lagged period, the effect is no longer significant. At lagged seven period, the result effect becomes positive but still not significant. The long run result shown in the previous section also shows that the effect is positive but not significant. The implication of this is that stock market volatility only has immediate effect on economic growth, and the effect dies down with time. However, oil price and exchange rate do not have short run significant effects on economic growth throughout the lagged periods.  The error correction term is negative and, significant at 1% indicating a low speed adjustment to equilibrium. The Durbin-Watson statistics shows there is no first order serial correlation. R-squared shows 52% of the variation in the dependent variable could be explained in the model, while the F-statistic shows that the regressors are jointly significant. The study concludes that all the variables are not stationary at level but become stationary after first differencing, thus implying that all the variables are integrated in the order of one. This implies that the test for long-run relationship (co-integration) can be carried out. It was also discovered that the F-statistic falls between the lower and upper bound critical values, thus indicating that the null hypothesis can be rejected. This indicates that the test for co-integration (long-run relationship) among the variables in the model is inconclusive. In addition, the study revealed that Market Capitalization (MCAP), Oil Price (OILP), Exchange rate (EXCH) are positively and significantly related to the economic growth while number of deals is negatively but not significantly related to the economic growth. The financial institutions in Nigeria such as commercial banks should create a massive awareness on the instruments traded in the capital market, review the interest rate and the fund raised through the instrument should be monitored by the Central Bank of Nigeria (CBN) to ensure that they are properly channeled for investment purposes.  Secondly Central Bank of Nigeria (CBN) should enact procedures, policies and guidelines to adequately monitor the operations of firms traded in the capital market to ensure that both dividend and interest rate attributable to debenture holders and shareholders are apportioned to them adequately and timely as a share of their interest in the companies as this will also increase confidence in the market.