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ABSTRACT
Relationship between stock prices and economic activities at primary, secondary and tertiary sectors was missing in the previous literature. We fill this gap using quarterly data spanning 2010Q1–2019Q4 for Nigeria. Our empirical evidence is based on the autoregressive distributed lag model and Toda–Yamamoto Granger causality test with structural break frameworks. We prove that stock prices greatly boost short-run primary sector activities and short- and long-run secondary and tertiary sectors activities. Unidirectional causality is observed from primary sector activities to stock prices and from stock prices to tertiary sector activities while bidirectional causality between stock prices and secondary sector activities is documented.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Correction Statement
This article has been corrected with minor changes. These changes do not impact the academic content of the article.
Notes
2. Note that if the variables are intergraded of order 0 (I[0]) and order 0 (I[1]), the maximum order of integration of the variables is 1 (1).
3. It therefore means that a rise in stock prices rises consumption expenditure and investment in Nigeria in the short and long run.
Additional information
Notes on contributors
Yunana Zumba
Yunana Ishemu has Bachelor of Science (BSc) and Master of Science (BSc) in Economics and is currently a researcher.