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An Analysis of the Effects of Insecurity on Capital Market and Economic Growth of Nigeria

Author

Listed:
  • Paul Aondona Angahar

    (Benue State University)

  • Luper Iorpev

    (Benue State University)

Abstract

This study adopts an ex-post facto research design to empirically examine the effect of insecurity on capital market performance and economic growth on Nigeria. Using data on peace index (PINDEX) and Peace Score (PSCORE) as proxy for insecurity, market capitalization as proxy for capital market performance and gross domestic product (GDP) as proxy for economic growth and total of listed equity and government stock as control variable collected from the global peace index (GPI), central bank of Nigeria (CBN) annual report, Securities and exchange (SEC) annual report and Nigerian Stock Exchange (NSE) annual report for a period of five years from 2007 to 2011. The multiple regression results indicate that there is a negative relationship between capital market performance, economic growth, and insecurity. Peace index is statistically significant to capital market performance while peace Score is not. However, peace score is statistically significant to economic growth while peace index is not statistically significant. The study recommends that government at all level should not rest until peace is restore in the country so as to enable the capital market contribute positively to economic growth, at the same time help in the attainment of vision 2020.

Suggested Citation

  • Paul Aondona Angahar & Luper Iorpev, 2012. "An Analysis of the Effects of Insecurity on Capital Market and Economic Growth of Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(3), pages 207-216, July.
    • Handle: RePEc:hur:ijaraf:v:2:y:2012:i:3:p:207-216
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    References listed on IDEAS

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    1. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    2. Gul, Tayyeba Gul & Hussain, Anwar Hussain & Bangash, Shafiqullah Bangash & Khattak, Sanam Waghma Khattak, 2010. "Impact of Terrorism on Financial Markets of Pakistan (2006-2008)," MPRA Paper 41990, University Library of Munich, Germany.
    3. Chen, Andrew H. & Siems, Thomas F., 2004. "The effects of terrorism on global capital markets," European Journal of Political Economy, Elsevier, vol. 20(2), pages 349-366, June.
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    Cited by:

    1. Ubesie M. C. & Nwanekpe C. E. & Ejilibe C., 2020. "Impact of Capital Market on Economic Growth in Nigeria," Business and Management Research, Business and Management Research, Sciedu Press, vol. 9(2), pages 49-57, June.

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    More about this item

    Keywords

    Insecurity; capital market performance; Economic growth; and peace index of Nigeria;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D99 - Microeconomics - - Micro-Based Behavioral Economics - - - Other

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