Capital Market Liberalization and Globalisation: It’s Impact on the Nigerian Economic Growth.

Owolabi Adesegun¹ and Rev. Ajayi, N.O.²

¹Department of Banking and Fianace, School of Business Studies, The Federal Polytechnic Ado – Ekiti, Nigeria

²Department of Business Administration and Management, The Federal Polytechnic Ado - Ekiti, Nigeria.

Corresponding author Email: owolabiseg@yahoo.com

Accepted 01 June 2012

Abstract

The paper examines the impact of capital market liberalization and trade openness in relation to the present global meltdown on Nigeria economic growth. The study takes a critical look at the important theoretical measure if capital market liberalization as well as measure of globalization in relation with global meltdown has significant effect on economic growth. A country – specific time series data were used to investigate the impact of capital market liberation and index of globalization on growth. The paper made use of simple linear regression and it was deduced that globalization is good for growth. Liberalization will enhance capital inflow, foreign domestic investment, and hence economic growth in Nigeria. Analysis of other related data indicates that Nigeria’s restrictive policies on trade and payment have continued to discourage growth in the net capital flow. The current trend indicates highly restrictive capital movement, and Nigeria is still far from benefiting from trade openness due to its rigidities and protective policies. The Paper suggests that since the regression result indicates significant positive relationship between growth and capital market liberalization, Nigeria should strive to put in place trade policies that will enhance a complete liberalization of the Nigerian capital market. 

Keywords: Capital Market, Liberalization, Globalization and Economic Growth.