FOREIGN INVESTMENT INFLOW AND CAPITAL MARKET DEVELOPMENT IN NIGERIA
The study investigates the impact of foreign capital investment inflow on capital market development in Nigeria. The time series secondary data covering the period 1990 to 2019 used for the study were obtained from the Central Bank of Nigeria Statistical Bulletin, Nigerian Stock Exchange factbook. Vector Error Correction Model was used in determining the impact of the independent variables on the dependent variable. The granger causality test and correlation coefficient were also used to determine the relationship between the variables of the study. The findings from the VECM revealed that FDI, FPI and EXTR have positive but insignificant impact on capital market development in Nigeria. The coefficient correlation disclosed positive correlation between FDI, EXCHR, EXTR and MCAP while the granger causality result revealed that both EXTR and FDI variables have ability to influence market capitalization. It is recommended that a deliberate policies including ease of doing business and adequate infrastructural facilities provision that will attract foreign investment inflow be established by the relevant authorities in Nigeria. Keywords: Foreign Investment Inflow, Capital Market Development, Nigeria, Nigerian Stock Exchange, Vector correction model