The Impact of Capital Market on Industrial Development

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THE ROLE OF CAPITAL MARKET IN INDUSTRIAL DEVELOPMENT IN NIGERIA

BY

IBE OBILOR SUNNY
(984052158)

A RESEARCH PROJECT PRESENTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINSITRATION (MBA) IN FINANCIAL MANAGEMENT TECHNOLOGY OF THE DEPARTMENT OF PROJECT MANAGEMENT, SCHOOL OF MANAGEMENT TECHNOLOGY FEDERAL UNIVERSITY OF TECHNOLOGY OWERRI

MARCH 2004.

CERTIFICATION

I certify that this research project was carried out by IBE SUNNY OBILOR in the department of Project management of the Federal University of technology under my academic supervision.

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STUDENTDATE

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SUPERVISOR DATE
(DR. S. M. NZOTTA)

------------------------------------------------------------- HEAD OF DEPARTMENT DATE
(DR. E. E. CHIGBU)

------------------------------------ ------------------------ EXTERNAL EXAMINER DATE

DEDICATION

To my Late Sister Rita Osuji (Nee Ibe).

ACKNOWLEDGEMENT

Actually, too many individuals contributed immensely towards the achievement of this feat. But, deserving special mention are first and foremost, my supervisor Dr. Sam M. Nzotta who never gets tired of seeing me even at odd times, and the H.O.D. Dr. Ezeji Chigbu, Prof. G.C. Nworuh, Dr. B.C. Asiegbu, Dr. Nwaezeaku and Dr. M.O. Anuolam. Also worthy of mention are my siblings Dr. Richard Ibe, Mr. Ralph N. Ibe, Arch. Raymond Ibe, Robert Ibe, Romanus Ibe, Racheal Ibe, Ronald Ibe and Dr. Reginald Ibe, am also indebted to my parents Mr. T.I. Ibe and Mrs. Agnes Ibe and my entire family members.

I must also remember the kind gesture of Linus C. Opara and his family, Iyk Oliver Ibe, Richard Nnochiri and Chikodi Onyia for providing me with data. I'm also indebted to Ijeoma, Johnson Nkemakolam, Izuchi Ajoku and Okay for their assistance.

ABSTRACT

This study was aimed at determining the significance of the capital market in enhancing industrial development in Nigeria. The study made use of secondary data predominantly, especially data from various issues and publications of some institutions over a seventeen-year period. The statistical tool used for the analysis is the multiple regression analysis.

At the end of the analysis, we found that the level of capital mobilized by the Nigerian industrial sector from the capital market has been significantly high. The second order test using T- statistic revealed that the inclusion of NSE and NBCI in the model is insignificant, rather only the NIDB disbursements is significant.

Our analysis also show the low index of manufacturing activity can be significantly explained by inadequate long term capital from the capital market. The second order test confirmed that only disbursements of NIDB and NBCI contributed to the significance of the model. The inclusion of NSE new issues is insignificant.

On the basis of our research findings we recommend that much attention should be focused on the development of capital market. Government should as a matter of necessity create the necessary economic and socio-political environment conducive for the operation of the capital market. TABLE OF CONTENT

Title Pagei
Certificationii
Dedicationiii
Acknowledgementiv
Abstractv
Table of Contentvii
List of Tablesix

CHAPTER ONE
1.0Introduction1
1.1Background of study1
1.2Statement of the problem8
1.3Objectives of the study11
1.4Hypothesis 12
1.5Significance of the study12
1.6Scope13
1.7Limitation of the study13
1.8Definition of terms13
1.9Organisation of the study 15

CHAPTER TWO
Literature Review
2.0Introduction17
2.1Meaning of Capital Market17
2.2.0Capital Market Institutions which...
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