Author(s)

Sule Yakubu¹, Taiwo Adewale Muritala¹, Hauwa Lamino Abubakar¹, Akeem Adewale Bakare¹, Wasiu Akintunde Yusuf², Hafsat Olatanwa Afolabi³

¹Department of Business Administration, Nile University of Nigeria, Abuja, Nigeria.
²Department of Economics, Nile University of Nigeria, Abuja, Nigeria.
³Department of Accounting & Finance, Al-Hikmah University, Ilorin, Nigeria.

The study examined the impact of pension funds on capital market development in Nigeria from 1995-2022 using ex-post facto research design. Data were collected from the Central Bank of Nigeria statistical bulletin and annual report of the pension fund commission. Data were analyzed using descriptive statistics, unit root test and auto regressive lag model (ARDL). The findings show that there is a long run relationship between market capitalization as a ratio of gross domestic product and selected pension fund variables in Nigeria. Also, there is a no long run relationship between all share index as a ratio of gross domestic product and selected pension fund variables in Nigeria. This implies that there is a short run relationship between all share index as a ratio of gross domestic product and selected pension fund variables in Nigeria. Also, pension fund has positive and statistically insignificant implying that the present value of pension contributory fund does not impact positively on its immediate past state. Inflation has positive and significant impact on market capitalization as a ratio of gross domestic product in Nigeria. Also, inflation has negative and insignificant impact on all share index as a ratio of gross domestic product in Nigeria. Pension investment at precious value is positive and as a statistically significant impact on all share index as a ratio of gross domestic product in Nigeria implying that pension fund investment could be used as purchase of share to increase the total share index in the Nigeria for future benefit for the pensioner whose contribution yields greater impact or return for stable future. The study recommended that pension fund administrators in Nigeria should understand that the rate of inflation is dynamic in Nigeria and the value of money is being lost as money is not worth its values in the next five years.

Pension Fund, Capital Market Development, ARDL, Nigeria

Yakubu, S. , Muritala, T. , Abubakar, H. , Bakare, A. , Yusuf, W. and Afolabi, H. (2023) How Does Pension Funds Impact Stock Market Development? An Empirical Analysis from Nigeria Using ARDL Technique. Open Journal of Social Sciences, 11, 575-600. doi: 10.4236/jss.2023.119036.