Abstract:
The aim of this paper work is to assess the effect of foreign direct investment on Capital market development in Nigeria. The study employed an Augmented Dickey- Fuller (ADF) unit root test and Johansen co-integration test to analyze the secondary data obtained from Central Bank of Nigeria statistical bulletin from 1999-2018. The absence of co-integration between foreign direct investment and market capitalization informed the resort to Ordinary Least Squares (OLS ) regression result which shows that foreign direct investment influence positively and significantly on market capitalization. Since foreign direct investment is a significant determinant. Efforts should be made by government and monetary authority to encourage foreign direct investment into Nigeria. However, given the lack of co-integration and low beta weight suggest that emphasis on foreign direct investment as a way of stimulating long run growth in the developing countries like Nigeria does not worth the while.
