Stock Market Development and Economic Growth in Emerging Economies of Nigeria, Brazil, Russia, India, China and South Africa: A Comparative Analysis

The study undertake an investigation of the causality and impact of the Stock Market development and economic growth in Nigeria and BRICS (Brazil, Russia, India, China and South Africa) emerging economies using quarterly time series data for the period 1995Q1 to 2015Q4 sourced from World Bank Indicator. The granger causality test, ordinary least squares multivariate regression and panels least squares estimation methods were employed to determine how stock market development granger causes and impacts on economic growth of the emerging countries. Stationarity test was conducted using the Augmented Dickey Fuller test to ensure the regression result was devoid of spuriousness. Findings arising from the empirical estimations indicate that in BRICS, TVSTR Granger causes TR unidirectionally while bi-directional relationship flows between INFR and RGDPGR. In Nigeria, there exists no granger causality from stock market development to economic growth, and vice versa. However, there is causality flowing from TR to TVSTR. It is therefore suggested that the Nigerian government could profit largely by maintaining multi-lateral trade and co-operation to foster more flow of foreign direct investment and tap into the various national resources of each of the BRICS country. causality tests establish a link between stock market development and economic The empirical investigation suggests that in the long-run, there is evidence of bidirectional causality between stock market development and economic growth; stock markets variables used include Turnover Ratio (TR) and Value of shares Traded (VT);the results indicate unidirectional causality from economic growth to stock market system; the Impulse response functions (IRFs) and variance decompositions (VDCs) that stock market development have short-run impact on initial market development indicators on economic growth in Nigeria using time series data where did a computation on an aggregate index for market capitalization. A critical evaluation of the analysis lucidly indicates that the indicators were not significantly at increasing the rate of the Nigerian economy in the period observed. Osho examines the role of stock market developments and economic growth in Nigeria through the use of multiple regressions; stock market capitalization ratio, the value of total shares traded and turnover were used as exogenous variables. The results revealed that stock market capitalization and the total value of shares traded negatively affecting the total assumes positive This gap way for in specific study among BRICS and Nigeria. All estimated coefficients were significant at 1% level and wrongly signed except TRVSTR. Particularly, MKTCAP and TR reduce real GDP growth rate among the group (BRICS) while TRVSTR and INFR promote unit increases in MKTCAP and TR will reduce real GDP growth rate by 0.03% and 0.11% respectively whereas unit increases in TRVSTR and INFR will raise real GDP growth rate by 0.36% and 0.04% respectively ceteris puribus. This result shows that capital market activities operation were not adequate to boost or enhance growth rate of real GDP. From this development, other estimating techniques were considered for robustness and to ascertain the adequacy and influence of the capital market on growth rate of real GDP among member nations of BRICS other power data estimation techniques that can come in handy are the fixed- effect and random –effect models, however, Hausman test need to be conducted to inform a choice of a more appropriate technique to adopt between the fixed or random earlier mentioned.