EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA
Recent evidence suggests that stock markets experience shift in volatility which can affect development of such markets. This study re-examines exchange rate volatility and stock market development in Nigeria using annual data from 1985-2020. The study employed multivariate regression analysis as w...
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| Format: | Article |
| Language: | English |
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Kwara State University, Malete Nigeria
2023-11-01
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| Series: | Malete Journal of Accounting and Finance |
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| Online Access: | https://majaf.com.ng/index.php/majaf/article/view/65 |
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| author | Ahmed Oluwatobi ADEKUNLE |
| author_facet | Ahmed Oluwatobi ADEKUNLE |
| author_sort | Ahmed Oluwatobi ADEKUNLE |
| collection | DOAJ |
| description |
Recent evidence suggests that stock markets experience shift in volatility which can affect development of such markets. This study re-examines exchange rate volatility and stock market development in Nigeria using annual data from 1985-2020. The study employed multivariate regression analysis as well as granger causality test to model the variables. Results show that exchange rate volatility has a significant negative impact on stock market capitalization and volume of transactions on the stock market. Essentially, exchange rate volatility has significant weak negative correlation with stock market capitalization and stock market volume of transactions. It is observed that there is no causality between exchange rate volatility and the four stock market indicators investigated. The study concludes that the effect of exchange rate volatility on stock market development in Nigeria is negative. Hence, the study recommends that dollarization of stock market transactions and operations in the Nigerian stock market should be discouraged.
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| format | Article |
| id | doaj-art-181b0142930048079a384610066f536e |
| institution | Kabale University |
| issn | 2735-9603 |
| language | English |
| publishDate | 2023-11-01 |
| publisher | Kwara State University, Malete Nigeria |
| record_format | Article |
| series | Malete Journal of Accounting and Finance |
| spelling | doaj-art-181b0142930048079a384610066f536e2025-02-10T23:06:37ZengKwara State University, Malete NigeriaMalete Journal of Accounting and Finance2735-96032023-11-0131EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIAAhmed Oluwatobi ADEKUNLE 0Kwara State University, Malete Recent evidence suggests that stock markets experience shift in volatility which can affect development of such markets. This study re-examines exchange rate volatility and stock market development in Nigeria using annual data from 1985-2020. The study employed multivariate regression analysis as well as granger causality test to model the variables. Results show that exchange rate volatility has a significant negative impact on stock market capitalization and volume of transactions on the stock market. Essentially, exchange rate volatility has significant weak negative correlation with stock market capitalization and stock market volume of transactions. It is observed that there is no causality between exchange rate volatility and the four stock market indicators investigated. The study concludes that the effect of exchange rate volatility on stock market development in Nigeria is negative. Hence, the study recommends that dollarization of stock market transactions and operations in the Nigerian stock market should be discouraged. https://majaf.com.ng/index.php/majaf/article/view/65Exchange Rate VolatilityStock Market Development |
| spellingShingle | Ahmed Oluwatobi ADEKUNLE EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA Malete Journal of Accounting and Finance Exchange Rate Volatility Stock Market Development |
| title | EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA |
| title_full | EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA |
| title_fullStr | EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA |
| title_full_unstemmed | EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA |
| title_short | EXCHANGE RATE VOLATILITY AND STOCK MARKET DEVELOPMENT: AN EMPIRICAL EVIDENCE FROM NIGERIA |
| title_sort | exchange rate volatility and stock market development an empirical evidence from nigeria |
| topic | Exchange Rate Volatility Stock Market Development |
| url | https://majaf.com.ng/index.php/majaf/article/view/65 |
| work_keys_str_mv | AT ahmedoluwatobiadekunle exchangeratevolatilityandstockmarketdevelopmentanempiricalevidencefromnigeria |