Abstract

This study investigates the impact ofstock market on the economic growth ofNigeria (1981 - 2018) using the ordinary leastsquare methodwhich incorporates endogenity in its estimation, the unit root test was carried outfor each ofthe variables using the ADF (AugmentedDickey Fuller) which shows thatLAMRC, LGCFandLSMR are stationary at 1st difference, andINTandLVTare stationary at level. The cointegraton was also conducted to determine ifthere exists a long run relationship among variables. Findingfrom the study shows that apercentage change in interest rate will lead to the growth ofthe gross capitalformation to response quickly by 2.117% and this responsels a positive response holding other variables constant. Thisproves that interest rate has apositive impact on GCF. The coefficient ofmarket capitalization is -0.124205. This suggests that an increase in MARC will lead to a negative response on the economy holding other variables constant. The coefficient ofvalue oftrade is 9.4312. This suggests that a percentage increase in value oftrade will lead to a negative response in the GCF holding other variables constant by 0.51%. Finally, stock marketreturns is seen to have apositive sign of0.001688 which implies that gross capitalformation will increase by 0.00169% in any one percent increase on stock market returns. The study recommends among others that the board ofadministrators mustformulate and revise dividendpolicy by thinking ofthefactors that have been evidenced to workout tremendous have an effect on dividendfee. Also the board length ofthe Nigerian deposit money banks have to consist ofINTformation as a way to make contributions in the direction ofthe growth ofthe corporations and decrease the monitoring cost ofthe agent.