Contemporary Research Analysis Journal

This study was motivated by the need to examine the link between financial markets investments and economic performance in Nigeria. Treasury bills, commercial papers, total equity, total government securities and corporate bonds were the employed financial markets investments channels while economic performance was proxied by gross domestic product. The study employed the longitudinal research design and data sourced from the Nigerian Apex bank statistical bulletin from 1986 to 2023. The Autoregressive Distributive Lag (ARDL) with its associated bond test was employed for data estimation given that a fractional order of integration was recorded in the stationarity test. Findings from results revealed that treasury bill, total equity and total government securities were positive and significant while corporate bond was negative and insignificant. The study conclude that treasury bills, total equity and total government securities were important variables in explaining the performance of gross domestic product in the short and long run in Nigeria. The study recommends among others the need for financial markets regulators to help corporate organization to raise investment fund through the issuance of corporate bond by removing bottleneck bureaucracy and stringent policies that hinders issuance of corporate bond as such fund raised will impact the overall performance of the economy.

Financial Markets Investments, Economic Performance, Financial Intermediation, Keynes Multiplier Theory, Finance-Growth Theory

1. Abdul-Kemi, I. Z. (2014). Government bond and economic growth and development in Nigeria: An empirical study. American Open Economics Journal, 2(3), 1-15
2. Aladelusi, K. (2021). Financial market instruments and economic growth in Nigeria (1999-2019). International Journal of Women in Technical Education and Employment, 2(1), 46-52
3. Alworth, J. S., & Borio, C. E. V. (1993). Commercial papers markets: A survey. BIS Economic Papers, no. 4
4. Aminu, M. T., Bambur, L. M. & Aliyu, R. (2017). An appraisal of the performance of money market as a catalyst of economic growth in Nigeria. International Journal of Management Studies, Business and Entrepreneurship Research, 2(4), 145-169. 
5. Aniefor, S. J., & Amahalu, N. N. (2022). Effect of capital market financing on economic growth of Nigeria. Journal Of Accounting and Financial Management, 8(6), 26–43. https://doi.org/10.56201/jafm.v8.no6.2022.pg26.43
6. Ayodeji, E. A., & Ajala, R. B. (2018). Capital market performance and economic growth in Nigeria (1984-2016). Journal of Advances in Social Science and Humanities, 4(11), 362-378
7. Bovarid, C. (2023). Corporate bonds: advantages and disadvantages. Investopedia, https://www.investopedia.com/articles/investing/080916/corporate-bonds-advantages-and-disadvantages.asp
8. Boyes, W. J. (2014). The Keynesian multiplier concept ignores crucial opportunity cost. Quarterly Journal of Australia Economics, 17(3)
9. Briggs, A. P. (2015). Capital market and economic growth of Nigeria. Research Journal of Finance and Accounting, 6(9), 82-93
10. Chowdhury, A. R., & Ahmed, F. (2024). Capital market efficiency and economic growth: evidence from Bangladesh. European Journal of Development Studies, 4(2), 1-6
11. Cici, G., & Gibson, S. (2012). The Performance of Corporate Bond Mutual Funds: Evidence Based on Security-Level Holdings. The Journal of Financial and Quantitative Analysis, 47(1), 159–178. http://www.jstor.org/stable/41499465
12. Cook, T. Q., & LaRoche, R. K. (1998). The money market. Federal Reserve Bank of Richmond, Virginia
13. Duisenberg, W.F. (2001). The role of financial market for economic growth. Being a speech delivered at an economic conference termed single financial market held at Vienna, https://www.bis.org/review/r010601b.pdf
14. Etale, L. M. & Ayunku, P. E. (2017). Does money market spur economic growth in Nigeria? Granger causality approach. International Journal of Development and Economic Sustainability, 5(7), 28-37
15. George-Anokwuru, C. C. (2023). Treasury bills and economic growth in Nigeria. International Journal of economics, commerce and management, 11(4), 42-59
16. George-Anokwuru, C. C. (2024). Money market instruments and economic growth in Nigeria. European Journal of Economics and Financial Research, 8(1), 69-85
17. Greenwood, J., & Smith, B. D. (1997). Financial markets in development, and the development of financial markets. Journal of Economic Dynamics and Control, 21(1), 145–181. https://doi.org/10.1016/0165-1889(95)00928-0
18. Gründl, H., Dong, M., & Gal, J. (2016). The evolution of insurer portfolio investment strategies for long-term investing. OECD Journal: Financial Market Trends, 2016(2), 1–55. https://doi.org/10.1787/fmt-2016-5jln3rh7qf46
19. Hoffman, B. N. (2023). The Impact of Money Market Activities on the Economic Growth of Ghana. Journal of Engineering Applied Science and Humanities, 8(2), 39-46. 10.53075/Ijmsirq/65543477557
20. Ighoroje J. E., & Osevwe-Okoroyibo, E. E. (2022). Financial market operations and economic growth of nigeria: An empirical insight. African Journal of Accounting and Financial Research 5(2), 13-31. https://doi.10.52589/AJAFR-PGJ3CZ7E.
21. Iyke-Ofoedu, M. I., Ihegboro, I. M., Uzochukwu, A. C., & Obiora-Okafor, C. A. (2024). Capital market and economic growth: evidence from Nigeria. European Journal of Finance and Management Science, 6(4), 52-59
22. Kumar, R. (2014). Strategies of banks and other financial institutions. ScienceDirect,https://www.sciencedirect.com/topics/economics-econometrics-and-finance/corporate-bond
23. Levine, R. (1996). Stock markets: A spur to economic growth. Finance and Development, 7-10
24. Levine, R. (1999). Financial Development and Economic Growth: Views and agenda. In World Bank Policy Research Working Paper. https://doi.org/10.1596/1813-9450-1678
25. Levine, R. (2021). Finance, growth and inequality. International Monetary Fund, working paper no. wp/21/64
26. Mbutor, O. M., Ochu, R. E. & Okafor, I. I. (2013). The Contribution of Finance to Agricultural Production in Nigeria. CBN Economic and Financial Review. 51(2), 1-20
27. Miller, M. H. (1998). Financial markets and economic growth. Journal of Applied Corporate Finance, 11(3), 8–15. https://doi.org/10.1111/j.1745-6622.1998.tb00498.x
28. Ngere-A, T. A., & Torbira, L. L. (2014). The role of capital market operation in capital formation. Journal of Finance and Investment Analysis, 3(1), 21-33
29. Nwaolisa, E. F., Kasie, E. G., & Egbunike, F. C. (2013). Effect of the Nigerian capital market operations on the local investments in Nigeria. Kuwait Chapter of Arabian Journal of Business & Management Review, 3(1), 35–42. https://doi.org/10.12816/0001280
30. Ogunsanwo, O.F., Adelugba, I.A., Efuntade, A.O., & Ajoloko, M.O. (2023). Effects of financial market intermediation on economic growth in Nigeria. The Journal of Developing Areas 57(2), 51-64. https://doi.org/10.1353/jda.2023.0022.
31. Oke, M. O., Dada, O., & Aremo, N. O. (2021). Impact of bond market development on the growth of Nigerian economy. Falia Oeconomica Stetinensia, 21(1), 61-75
32. Olokoyo, F. O., Adetiloye, K. A., & Ikpefan, O. A. (2016). Banks’ intermediation role and industrial output in developing economies. The Social Science, 11(24), 5838-5844
33. Olubiyo, S. O. (2000). An overview of the Nigerian financial market before and during the deregulation of the economy 1955-1993. Savings and Development, 24(3), 345–360. http://www.jstor.org/stable/25830734
34. Omodero, C. O. & Alege, P. O. (2022). Public sector bonds and economic growth in Nigeria. Montenegrin Journal of Economics, 18(2), 95-103
35. Oriakpono, A. E., Obadiah,T. G. & Musiliu S. B. (2022). An empirical analysis of investment in securities and Nigerian economic growth. International Journal Management Studies and Social Science Research, 4(5), 200-210
36. Orji, J.O., Ezema, C. A., Uduakobong, I., & Emedoing, I. A. (2023). Impact of treasury bills on economic growth in Nigeria. International Journal of Social Science and Management Review, 6(1), 215-227
37. Popov, A. (2017). Evidence of finance and economic growth. European Central Bank Working Paper Series, no. 2115
38. Rao, M. S., & Pillai, K. R. (2011). Risk and return analysis of commercial papers. Asian Business Review, 7(4), 40-49
39. Rother, P. C. (1999). Explaining the behaviour of financial intermediation: evidence from transition economies. International Monetary Fund, working paper wp/99/36
40. Shin, Y. (2013). Financial markets: an engine for economic growth. federal reserve bank of st. louis. https://www.stlouisfed.org/publications/regional-economist/july-2013/financial-markets--an-engine-for-economic-growth
41. Tsintop, U. D., & Bala, T. T. (2023). The impact of money market activities on the economic growth of Nigeria. FUW-International Journal of Management and Social Science, 8(2), 61-74
42. World Bank. (2000). Nigeria: Financial Sector Review, Volume 1. Overview and Macro-Financial Environment. © Washington, DC. http://hdl.handle.net/10986/15102 License: CC BY 3.0 IGO