Stock Market Price Index and Fiscal Policy in Nigeria: Empirical Evidence
Vol. 4 Issue 2
This study investigated the effect of the fiscal policies on the stock market in Nigeria using the structural VAR methods. The study was to determine to what extent stock market price index respond to fiscal policies of the Nigerian government over the period. The study covered the period of 1985 – 2015. Data used were sourced from the Central Bank of Nigeria Statistical Bulletin, 2017. The data used consist of 31 yearly observations on total government revenue, total expenditure and the Nigerian stock market price index from 1985 to 2015. The technique of analysis included unit root tests, granger causality test and structural Vector Autoregressive analysis (SVAR). The analysis found that although fiscal policies have positive effects on the stock prices, they are not significant over the period. The study, therefore, recommended that the financial market authorities such as the SEC and NSE should be given the power to make by-laws that govern the activities of the market since the activities of the government do not have significant effect on the prices of stocks.
