Capital Market - Manufacturing Sector Relationship Revisited in Nigeria

Abstract

Based on the financial intermediation theory, this study examined the impact of capital market on the manufacturing sector performance in Nigeria from 1985 to 2023. Market capitalization (MKT), all-share-index (ASI), and total value of trades (TVT) were used to measure capital market. The auto regressive regression showed that TVT had positive and significant relationship, ASI only had a positive relationship but market capitalization had negative and insignificant relationship on the manufacturing sector performance. The results imply that manufacturing sector can perform better if capital market reduces borrowing constraint, improve capital allocation efficiency, and appropriately absorbs foreign advanced technologies. Policymakers should guarantee capital market liquidity and timely channel of funds for manufacturing sector performance.