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| Title: | The Impact of Macroeconomices Variables on Stock Market Performance in Nigeria. |
| Author(s): | Maton-Awaji A. C, Ezebunwa J. N. & Amadi R. C |
| Abstract: | This study investigates the impact of macroeconomic variables on stock market performance in Nigeria from 1985 to 2023, focusing on the relationships between stock market returns (SMR), gross domestic product (GDP), inflation rate (INFR), and exchange rate (EXR). Utilizing data sourced from reputable financial and economic databases, the research employs the Autoregressive Distributed Lag (ARDL) approach to analyze both short-run dynamics among the variables. Stationarity tests reveal that GDP and EXR are stationary at levels (I(0)), while INFR is stationary at first difference (I(1)), indicating a mixed order of integration. The ARDL Bounds co integration test confirms a long-run relationship among the variables, justifying the application of ARDL analyses. The findings indicate that GDP has a significant positive effect on SMR in both the short and long run, suggesting that economic growth enhances investor confidence and market performance. Conversely, INFR exhibits a negative impact on SMR, highlighting the detrimental effects of rising inflation on stock market dynamics. Additionally, EXR positively influences SMR in the long run, although its short-run impact is less pronounced. The study concludes that effective economic policies aimed at promoting GDP growth, controlling inflation, and stabilizing exchange rates are essential for fostering a robust stock market environment in Nigeria. These insights contribute to the understanding of the interplay between macroeconomic factors and stock market performance, providing valuable implications for policymakers and investors alike. |
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| Journal: | Journal of Economic Research and Development Studies Vol 1 No 1 |
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