LONG-RUN INDUSTRY EFFECT ON STOCK RETURN: AN EMPIRICAL EVALUATION OF SELECTED NIGERIAN BANKS

Authors

  • A Arewa Department of Accounting and Finance, Faculty of Management Sciences Lagos State University, Lagos, Nigeria
  • P C Nwakanma Department of Finance and Banking, Faculty of Management Sciences University of Port Harcourt, River State, Nigeria

DOI:

https://doi.org/10.19044/esj.2013.v9n22p%25p

Abstract

The study develops a fresh econometric equation to estimate the nature of the relationship between banking industry activities and stock market returns in Nigeria. The equation utilizes annual data sourced from the various volumes of Nigerian Stock Exchange (NSE) Fat books, NSE Daily Official List and annual reports of the selected banks for a period of 25 years ranging from 1984 to 2009. Our findings reveal that the activities of the banking industry and stock market return maintain a long-run relationship. Furthermore, we discover that an increase in earning produces a positive multiplier effect on stock market return; while retention of earning for acquisition of assets and high level of debt/leverage ratio is found to be detrimental to stock prices here in Nigeria.

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Published

2013-08-31

How to Cite

Arewa, A., & Nwakanma, P. C. (2013). LONG-RUN INDUSTRY EFFECT ON STOCK RETURN: AN EMPIRICAL EVALUATION OF SELECTED NIGERIAN BANKS. European Scientific Journal, ESJ, 9(22). https://doi.org/10.19044/esj.2013.v9n22p%p

Issue

Vol. 9 No. 22 (2013): ESJ August Edition

Section

Articles

License

This work is licensed under a Creative Commons Attribution 4.0 International License.