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Corruption And Stock Market Performance In Nigeria

Author

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  • OMODERO, Cordelia Onyinyechi

    (Department of Accounting, College of Management Sciences, Micheal Okpara University of Agriculture, Umudike, Abia State, Nigeria)

  • DANDAGO, Kabiru I.

    (Department of Accounting, Faculty of Social & Management Sciences, Bayero University, Kano, Nigeria)

Abstract

The study examines the effect of corruption (using corruption perception index and Nigeria corruption ranking as proxies) on the stock market performance (proxied with share price index) in Nigeria. The study employed time series data spanning twenty years (1996-2016). Data availability especially on corruption indices was the major reason underlying the choice of period. The data were obtained from CBN Statistical Bulletin and Transparency International website. With the aid of SPSS version 20, the study used Multi-regression analysis and student t-test for the test of hypotheses. The study finds a significant positive correlation between corruption and stock market performance in Nigeria. The result reveals robust positive and significant relationships between Nigeria Corruption Ranking, Corruption perception index and Share price index. The result of the study explains the integration of graft into the Nigerian economic system. Therefore, adoption of a strong form of stock market efficiency by the Security and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) for actualization by all listed firms in Nigeria is hereby recommended. In addition, we recommend that the Federal and State governments should formulate more result-oriented policies and rules that could help combat corruption more effectively

Suggested Citation

  • OMODERO, Cordelia Onyinyechi & DANDAGO, Kabiru I., 2018. "Corruption And Stock Market Performance In Nigeria," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 18(4), pages 23-40.
    • Handle: RePEc:ris:sphecs:0342
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    References listed on IDEAS

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    1. Conor M. O'Toole & Finn Tarp, 2014. "Corruption And The Efficiency Of Capital Investment In Developing Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 26(5), pages 567-597, July.
    2. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
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    Cited by:

    1. Kashif Islam & Ahmad Raza Bilal & Zeeshan Saeed & Samina Sardar & Muhammad Husnain Kamboh, 2023. "Impact of government integrity and corruption on sustainable stock market development: linear and nonlinear evidence from Pakistan," Economic Change and Restructuring, Springer, vol. 56(4), pages 2529-2556, August.
    2. Omodero Cordelia Onyinyechi, 2019. "Effect of Corruption on Foreign Direct Investment Inflows in Nigeria," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 29(2), pages 54-66, June.
    3. Cordelia Onyinyechi Omodero, 2020. "Taxation Income, Graft and Informal Sector Operations in Nigeria in Relation to Other African Countries," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(2), pages 163-172, April.

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    More about this item

    Keywords

    stock market performance; corruption; share price index; corruption perception index; Nigeria Corruption Ranking;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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