Government Bond, Corporate Bond and Capital Market Growth in Nigeria
The study examined the effect of government and corporate bonds on capital market growth in Nigeria. The study utilized time series data spanning 19 years (2000 to 2018) from designated sources in achieving the stated objectives. Data on government and corporate bonds, capitalisation rate and equity stock were obtained from the Central Bank of Nigeria (CBN) and Nigerian Exchange Group (NXG) publications. The data was subjected to unit root test and this informed the adoption of autoregressive distributed lag model (ARDL). The technique was adopted after the mixed order of integration of the variables. The study discovered that government bond had short and long run effect on the capital market capitalization in Nigeria. Also, corporate bonds enhance the capital market growth in Nigeria. It plays an important role in short run and also long run by contributing to the capitalization of the market. It was further submitted that macroeconomic fundamentals comoved with the performance of both corporate bonds and government bond in the country. Among others, the study recommended the strengthening of the regulatory framework to ensure market integrity, protect investors, and promote fair trading practices are essential for long-term capital market growth. Keywords: Capital Market Growth, Corporate bond, Government bond, Market Capitalisation Rate