FOREIGN CAPITAL AND CAPITAL MARKET DEVELOPMENT IN NIGERIA
ABSTRACT
This study examines the impact of foreign capital and capital market development in Nigeria. In the light of the empirical review and other discussions, a number of questions arose as to whether there is relationship between foreign capital and the development of Nigeria capital market: as well as to ascertain the relationship between foreign capital and Nigeria Gross Domestic Product. Using the Ordinary Least Square (OLS) regression technique with the aid of computer software for a 30 – year period (1981-2011) time series data, the empirical findings revealed among other things, that foreign direct investment inflow has a positive but insignificant impact on capital market development in Nigeria. The study recommends, among others, that the Nigerian government should encourage the inflows of foreign portfolio investment and contact policy institutions that can ensure the transparency of the operations of foreign companies within the economy.  
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1    Background to the Study                    
1.2    Statement of the Researcher Problem             
1.3    Objective of the Study                    
1.4    Research Hypothesis                     
1.5    Scope of the Study                         
1.6    Significance of the Study                        
1.7    Limitation of the Study                    
CHAPTER TWO: LITERATURE REVIEW
2.1    Issues on Foreign Capital                         
2.2    Capital Inflows in the Developing Countries            
2.3    Review of Empirical Literature on the Development of Capital
Market                                 
2.4    Contribution of the Capital Market to Socio-Economic
Development of Nigeria                     
2.5    Capital Market and Economy Development         
2.6    Performance of the Nigerian Capital Market         
2.7    Problems of the Nigerian Capital Market                
2.8    Impact of the Global Financial Crisis on the Nigerian Capital
Market                                 
2.9    Capital Market Reforms                     
CHAPTER THREE: RESEARCH METHODOLOGY
3.1    Introduction                             
3.2    The Research Design                     
3.3    Sources of Data Collection                     
3.4    The Population of the Study                 
3.5    Model Specification                     
3.6    Method of Data Analysis                     
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULT
4.1    Introduction                             
4.2    Correlation Analysis                     
4.3    Regression Analysis                     
4.4    Tests of Hypothesis                         
4.4.1    Hypothesis I                             
4.4.2    Hypothesis II                         
CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
5.1    Summary of Findings                     
5.2    Policy Recommendation                     
5.3    Conclusion                             
    References                             
    Appendix I                             
Appendix II                                
Appendix III                                
LIST OF TABLES
Table 4.1:    Pair-Wise Correlation Martrix                 
Table 4.2:    Economic Growth and Capital Market Effect         
CHAPTER ONE
INTRODUCTION
1.1        BACKGROUND TO THE STUDY
The role of capital in the production process and economic performance of a nation has long has recognized. Capital provides the impetus for the effective and efficient combination of factors of production to ensure sustainable economic growth. Moreover, the effective utilization of productive resources accumulated over time would determine the pace of growth of an economy.
Growth in productive activities and its distribution determined the social well being of the population. Capital formation, however, can only be achieved through conscious efforts at sowings mobilization and accumulation of resources by both the public and private sectors of an economy. The unique position of the capital market could therefore be appreciated from this perspective. Financial markets generally provide avenue for sowings of various tenors that are made available for utilization by various economic agents.
The capital market, which is a major segment of financial markets provides a setting through which medium to long-term resources are provided for productive utilization (Babalola and Adegbite, 2009).
Donwa and Odia (2010), opine that, the capital market has been identified as an institution that contributes to the socio-economic growth and development of emerging and developed economics. This is made possible through some of the vital roles played such as channeling resources, promoting reforms of modernize the financial sectors, financial intermediate capacity to link deficit to the surplus sectors of the economy, and a veritable tool in the mobilization and allocation of savings among competitive uses which are critical to the growth and efficiency of the economy.
Idolor and Eran (2011), buttress that the impact of the financial sector which comprises of the capital and money markets in an economy cannot be over emphasized. It plays a very vital role in the general performance of the economy. It also basically serves as a lubricant that keeps the wheels of the economy turning as well as affects the political and socio-cultural system of the country.
May, Adedinran and Elizabeth (2012), opine that the capital market is the prime motor that drives any economy on its path to growth and development because it is responsible for long term growth capital formation.  The money market only complements the capital market by providing the necessary working capital to support gross fixed capital formation. Unfortunately, performed its natural function of funding investment. One of the major indicators of capital market development is the proportion of long-term fixed capital that is raise in relative to the gross domestic production.
According to Singh (2009) foreign capital has played a significant role for every nations economy, regainless of its level of development for the developed countries, it is used to increase accumulation and rate of investments to create conditions for more intensive economic growth.
Osinubi and Amgtuanyeddiwe (2010), add that in most economics however, domestic private investment has proven to be insufficient in giving the economy the required boost to enable it meet its growth target because of the mismatch between their capital requirement and sowing capacity. Foreign private investment, thus, augments domestic resources to enable the country carry out effectively her development programmes and raise the standard of living of her people.
In the light of this, the researcher intends to empirically investigate the impact of foreign capital and the development of capital market.
1.2     STATEMENT OF THE RESEARCHER PROBLEM
The capital market is one of the main avenues investors invest that hard earned currency in anticipation of good returns of yield. But since the inception of the global economic crunch in addition to a number of causing factors the impact of the capital market has remained rather docile. The federal government effort at revamping it has still not yielded enough result.
In the light of this, the following research questions are being raised.
1.    Is there significant relationship between foreign capital and the development of the Nigeria capital market.
2.    Is there significant relationship between foreign capital and Nigeria gross domestic product.  
1.3      OBJECTIVE OF THE STUDY  
1.    To find out the relationship between foreign capital and the development of the Nigerian capital market.
2.    To ascertain the relationship between foreign capital and Nigeria gross domestic product.
1.4     RESEARCH HYPOTHESIS
The following hypothesis have been formulated to serve as a base for this research;
Hypothesis 1
Ho:     There is no significant relationship between foreign capital and the development of Nigerian’s capital market
H1:     There is significant relationship between foreign capital and the development of Nigeria capital market
Hypothesis 2
Ho:     There is no significant relationship between foreign capital and Nigeria gross domestic product.
H1:     There is significant relationship between foreign capital and Nigeria gross domestic product.
1.5     SCOPE OF THE STUDY
It is a well known fact around the globe that there is no limitation to knowledge. As a result of the above fact, the scope of this research will be limited to the sensitivity of the general public as well as  concerned authorities of capital market in Nigeria.
Temporally or in term of time series, a period  of 30years is used i.e 1980 to 2010 using some macro economic variables as means  of  assessing the impact of foreign capital  and capital market development.
1.6     SIGNIFICANCE OF THE STUDY
This study will be important and beneficial  to stakeholders  on the unimportant of foreign capital  and capital market development.
The study will assist the government and regulatory agencies on ene proper conduct of foreign capital and capital market development.
The study will help to restore the lost confidence of the public as regard the foreign capital  and capital market development in Nigeria.
The study will assist both academic and other future researches in this similar subject matter they will find it as a useful source of learning
 1.7     LIMITATION OF THE STUDY
In the course of conducting this research work, the researcher encounter some constraints.
They include:
1.    Inadequate research materials: Study materials were of limited supply due to the practicality of the study. And where they were available, the cost involved in serving for them was very expensive.
2.    High financial cost involved in souring for available materials and other necessary information.