Abstract
Capital market’s importance cannot be overemphasized, especially in developing economies like
Nigeria. Capital markets allow traders to buy and sell stocks and bonds, and enable businesses to
raise financial capital to grow. Businesses also have reduced risk and expenses in acquiring
financial capital because they have reliable markets where they can obtain funding. Also, it spurs
economic growth since it serves as a financial fulcrum between the deficit units and surplus units
of an economy. However, since the recapitalization of the capital market in the 2000s and the
establishment of the Nigeria Stock Exchange (NSE) and Securities and Exchange Commission
(SEC), various scholars have engaged in arguments on investigating if capital market leads to
economic growth or not. Thus, this study focuses on investigating the impact of the capital market
on economic growth (1999 to 2021) using the ARDL model. Findings suggest that both negative
and positive long-run relationships exist between capital markets and Nigerian economic growth.
We therefore recommend that the development of a long-term bond market, as well as
strengthening the supervision, clearing, settlement, and risk management of the capital market,
would boost the economic growth in Nigeria.