1.1      Background of the Study

The stock market is a common feature of a modern economy and it is reputed to perform functions that promote the growth and development of the economy. The market is an economic institution; which promotes efficiency in capital formation and allocation. It enables governments and industry to raise long-term capital for financing new projects, and expanding and modernizing industrial and commercial concerns. Investment in the stock market is long term in nature; hence any development that could affect the stability of the polity or economy usually has serious impact on the performance of the stock market. Corrado and Jordan (2002) identify inflationary rate amongst others as a factor that could influence the market performance. Economists have long recognized inflation as one of the major factors that could derail the economy of any country. In Nigeria, the problem of inflation has caused the monetary authority to seek remedies on a continual basis. Therefore, studying the impact of macroeconomic factors such as the rate of inflation on stock market performance has implications for investors and policy makers. The stock market performance influences the performance of the economy vice versa. According to Alile (1997), the central objective of the stock exchange worldwide remains the maintenance of the efficient market with attendant benefit of economic growth. In recent times there was a growing concern on the role of stock market in economic growth (Levine and Zervos, 1996; Demirguc-Kunt and Levine, 1996; Oyejide, 1994; Nyong, 1997; Obadan, 1998; Onosode, 1998; Emenuga, 1998; Osinubi, 1998). The stock market is of interest to economists and policy makers because of the perceived benefits to the economy.The stock market serves as a veritable tool in the mobilization and allocation of savings among competing uses which are critical to the growth and efficiency of the economy.

1.2   Statement of the Problem

Studies by DeGregorio (1992); Fischer (1993); Barro (1995); and Bruno and Easterly (1995) uncover a significant negative correlation between inflation and the growth performance of various economies. This paper investigates the empirical association between inflation and the performance of the stock market in Nigeria; to establish statistical association between inflation and various stock market performance measures. Evidence regarding this relationship in Nigeria seems scarce in the literature. It is in the light of this that the detailed nature of the empirical linkages between inflation and the various measures of stock market performance in Nigeria is being undertaken.

1.2      Objectives of the Study

The objectives of this study include but not limited to;

  1. To ascertain the correlation between inflation and the total value of listed shares in the Nigerian stock market.
  2. To know whether there is any correlation between stock market liquidity and inflation.
  3. To determine the impact of inflation on the performance and condition of the stock market.
  4. To highlight the correlation between inflation and the turnover ratio of the Nigerian stock market.

1.4   Research Questions

In the paper the issues for determination are as follows:

  1. What is the correlation between inflation and the total value of listed shares in the Nigerian stock market?
  2. Is there any correlation between stock market liquidity and inflation?
  3. Does inflation impact positively on the performance and condition of the stock market?
  4. What is the correlation between inflation and the turnover ratio of the Nigerian stock market?

1.5   Research Hypotheses

Ho: There is no negative statistical association between stock market returns measures of the Nigerian stock market and inflation.

Hi:There is a negative statistical association between stock market returns measures of the Nigerian stock market and inflation.

1.6   Significance of the Study

The performance of the stock market is of utmost importance to investors, policy makers and the likes. The measures of stock market performance include market capitalization; which measures stock market size, stock market liquidity which refers to the ability of investors to buy and sell securities easily. Others are All Share Index; which reflects the performance and condition of the stock market, and the turnover ratio; which is an index of comparison for market liquidity rating and level of transaction costs. In Nigeria, inflation rates have persistently been two digits; this has been an issue confronting policy makers, investors, analysts and economists. It is one of the major factors that could derail the economy of any nation. The stock market which also contributes to economic growth will invariably be affected by inflation, hence the need for this paper.

1.7   Scope/Limitations of the Study

This study is to evaluate the impact of inflation on Nigeria Stock Market Returns using Road Transport Sector of Nigeria as a case study.

Limitations of Study

  1. 1.        Financial Constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
  2. 2.        Time Constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8   Definition of Terms

Stock Market:Is the market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets.It is a place where shares of pubic listed companies are traded

Inflation: is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. It is a general increase in prices and fall in the purchasing value of money.

Regression Model:Is a statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables.

Economic Development:        Refers to the sustained, concerted actions of communities and policymakers that improve the standard of living and economic health of a specific locality.



Click Here To Get The Complete Project »

How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper

    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.