CAPITAL ACCUMULATION AND ECONOMIC GROWTH: THE ROLE OF THE NIGERIAN STOCK EXCHANGE
CAPITAL ACCUMULATION AND ECONOMIC GROWTH: THE ROLE OF THE NIGERIAN STOCK EXCHANGE
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Date
1987-11
Authors
Ado, Mary M. N.
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Abstract
The general rate of economic growth is limited
by the shortage of capital which has been identified
as the core factor by which all other aspects of
growth are made possible. Therefore, development
efforts are geared towards finding a way of breaking
the vicious circle between capital shortage and underdevelopment
by designing a mechanism for achieving an
optimum rate of capital accumulation. The rate of
capital accumulation is determined by the level of
investment, which necessitates domestic savings and/
or foreign assistance. However, foreign assistance
has its implicit burden, especially for the less
developed countries (LDCs). As such, domestic savings
has become the most reliable source of investment
finance, while foreign assistance acts as a supplement.
The mobilisation of large investible funds required
for increased rate of capital accumulation thus becomes
an imperative.
It is on the above-mentioned premise that this
study of the Nigerian Stock Exchange is being Undertaken,
albeit as a single financial institution where
large sums of investible funds can be raised. Informed
by the need to ascertain its real significance, and
its contribution to capital accumulation and the
growth process, especially through the new issues of
its primary market (this signifies new saving creation
in the market), simple but testable macro-economic
models are used to empirically test the significance
of new issues to economic growth vis-a-vis the relative
significance of other determinats of investment
or gross capital accumulation viz: domestic institutionalised
savings and foreign capital inflow. The
Nigerian Stock Exchange* was found to be significant,
with potentials of further contributing to gross
capital accumulation and growth. As such, ways in
which to further the contributiion of the Nigerian
Stock Exchange are suggested. These suggestions
centers around increasing government participation
in providing a conducive atmosphere for the development
of indigenous enterprises. This is identified
as a necessary step to increase the supply of indigenous
corporate new issues thereby neutralising the
current foreign-owned/dominated corporations quoted
on the exchange.
Description
A Thesis submitted to the Postgraduate
School, Ahmadu Bello University, Zaria, in
partial fulfillment of the requirements for
the award of the degree of Master of Science
(Economics).
Department of Economics
Faculty of Arts and Social Sciences
Ahmadu Bello University
Zaria, Nigeria.
Keywords
CAPITAL,, ACCUMULATION,, ECONOMIC,, GROWTH,, ROLE,, NIGERIAN STOCK EXCHANGE