IMPACT OF MARKET CAPITALIZATION ON MANUFACTURING OUTPUT IN NIGERIA

Abstract

This study examined the impact of market capitalization on manufacturing output in Nigeria 
over the period 1981–2023, using annual time-series data. Employing the autoregressive 
distributed lag (ARDL) model, the findings reveal that market capitalization (MCP), the 
number of deals (NDL), and foreign direct investment (FDI) have significant positive impacts 
on manufacturing output in the long run. Conversely, inflation is found to have a detrimental 
effect on manufacturing output. In the short run, lagged market capitalization and the number 
of deals exhibit positive influences, underscoring the dynamic role of the capital market in 
fostering industrial performance. The study concludes that market capitalization holds 
substantial potential for boosting Nigeria’s manufacturing sector. To harness this potential, the 
study recommends expanding the capital market by encouraging firm listings, enhancing 
transparency through improved corporate governance, and strengthening regulatory 
frameworks to bolster investor confidence. These measures are pivotal for positioning the 
capital market as a cornerstone of Nigeria’s industrial growth and economic development.