Abstract Capital market is an integral part of the financial system that provides an efficient delivery mechanism for mobilization and allocation, management and distribution of long-term funds. It is a network of financial institutions and infrastructure that interact to mobilize and allocate long-term funds for the economy. There is abundant evidence that most Nigerian business lack long-term capital because the business sector has mainly depended on short-term financing such as overdrafts to finance long-term capital i.e. mismatch of funds. Based on the maturity matching concept, such financing is risky. The Nigerian capital market faces difficulty in properly laying down proper implementation of the rules and guidelines for operations. Endless corruption among top officials in the regulatory body like securities and exchange commission, has also crippled the Nigerian capital market. The main objectives of the study are to determine the impact of capital market operations on economic growth in Nigeria. This work is divided into 5 chapters. These chapters contain every information and details concerning the operations of capital market and economic growth in Nigeria for the period of 1995-2016. CHAPTER ONE INTRODUCTION 1.1 Background of the Study The primary role of the capital market is allocation of ownership of the economy’s capital stock. The ideal of a capital market is made in which prices provide accurate signals for resource allocation; that is a market in which firms can make production investment decisions and investors can choose among the securities that represents ownership of firm’s activities under the assumption that security prices at any time, “fully reflect” all available information. Capital market refers to activities that gather funds from some entities and make them available to other entities needing funds. In the developing world, the central role which the capital market plays has not been discountenanced too. Perhaps this is the decision why in developing economies like Nigeria, their operations have remained a livewire. The capital market is a common feature of a modern market economy, and it is reputed to perform necessary functions which promote the growth and development of an economy. Capital market channels the wealth of savers to those who can put it to long-term productive use, such as companies or government making long-term investments. Capital formation entails accumulated savings out of income of either organizations or individuals. Its investment is fixed assets which in part are financed with monies raised through the capital market. (ALFAKI, 2006). Dealers in the security segment of the capital market include banking institution stockbrokers, investment and merchant bankers and ventures capitalist that intermediate between the market and the public. Well-functioning financial market are very crucial for the promotion of global financial integration. An efficiently functioning domestic financial market can be in better position in a country’s competitiveness in the market for global capital (senbet & otchere, 2005). Besides the historical focus on banking, there is an expanding theoretical literature on the links growth, but very little empirical evidence. Levine (1991) and Valerie et al (1995) derive models where more liquid stock markets. Market which is less expensive to trade equities-reduce the disincentives to investing in long duration projects because investors can easily sell their stake in the project, if they need their saving before the project matures. Enhanced liquidity therefore facilitates investment in longer-run, higher return projects that boost productivity growth. Similarly, Michael and Gregor et al (1994) show that greater international risk sharing through international integrated stock markets induces a portfolio shift from safe, low-return investment to high-return investments, thereby accelerating production growth. These liquidity and risk model however also imply that greater liquidity and international capital market integration ambiguously affect saving rates. Levine & zeros (1998). Furthermore, the development of the capital market has generated two major set of economic benefits. First, it has improved the allocation of capital because the prices of corporate debt and equity respond immediately to shift in demand and supply, changes in the outlook for an industry (and /or company) are quickly embodied in current asset prices. The signal created by change in price of a security a encourages investors as a result of higher prices or discourages them due to lower prices, thus is because the investor often used the price of securities to predict the likely trend of the market as either bullish or bearish. Business with high return attracts additional capital quickly and easily. When there is a decline in demand, prices drops, and it is a signal to market investors to cut the flow of capital to the industry which leads to a decline in economic growth. Capital market is an integral part of the financial system that provides an efficient delivery mechanism for mobilization and allocation, management and distribution of long-term funds. It is a network of financial institutions and infrastructure that interact to mobilize and allocate long-term funds for the economy. The discussion on capital market cannot be overemphasized as limited access to capital presents a critical challenge to growth in the economy. Well-functioning market ensures that corporations efficiently mobilize capital for growth so that valuable projects will be financed. 1.2 Statement of the Problem There is abundant evidence that most Nigerian business lack long-term capital because the business sector has mainly depended on short-term financing such as overdrafts to finance long-term capital i.e. mismatch of funds. Based on the maturity matching concept, such financing is risky. a. According to Juwah (2018), the reasons why businesses were not able to source for long-term capital is because of unstable capital market which has been facing fluctuations, for the prices of stocks. This has not been proven favourable to investor in the market. For example, Nigeria capital market along with others around the world, crashed during the Global financial crisis of 2009. In 2017, Nigeria also recorded another economic recession, making it the worst in country’s history in 29 years. This had proven that the markets are largely risky and unpredictable for investors. b. The Nigerian capital market faces difficulty in properly laying down proper implementation of the rules and guidelines for operations. Endless corruption among top officials in the regulatory body like securities and exchange commission, has also crippled the Nigerian capital market. c. Another problem is the limited knowledge about Nigerian capital market. People in Nigeria, find it difficult to understand due to lack of information. Nigerians need to understand the basic knowledge about shares, debentures, and bonds to trade or invest in the capital market. d. Another problem is the market size problem: the securities and exchange commissions reported on Nigeria capital market that the country has not equipped to be relevant in some key areas or sectors of the economy. It stated that the Nigerian capital market is not big enough to source out funds for elaborate long-term projects. 1.3 Objectives of the Study The main objectives of the study are to determine the impact of capital market operations on economic growth in Nigeria. However, the specific objectives are to. i. Determine the impact of market capitalization on the gross domestic product. ii. Access the effect of total new issues on the gross domestic product. iii. Identify the effect of the volume of transaction on the gross domestic product in Nigeria. iv. Examine the impact of total listed equities stock on the gross domestic product in Nigeria. 1.4 Research Questions Based on the statement of the problem; the following research questions were raised: i. What is the impact of the market capitalization on gross domestic product in Nigeria? ii. How does total new issues affect gross domestic product in Nigeria? iii. What extent does the volume of transaction in the capital market contribute to the growth of the gross domestic product? iv. What is the impact of total listed equity on the gross domestic product in Nigeria? 1.5 Research Hypotheses In line with the objectives of the study, the following hypothesis has been formulated in null form. H01. Market capitalization has no significant impact on Nigeria’s gross domestic product. H02. Total new shares have no significant effect on Nigeria’s gross domestic products. H03. Volume of transactions have no significantly affected Nigeria’s gross domestic product. 1.6 Scope of the Study The economy is a large component with lots of diverse and sometimes complex part. This research work will only work at a particular part of the economy (the financial sector). This work will not cover all facets that make up the financial sector but shall focus only on the capital market and its activities as it impacts on the Nigeria economic growth. The important variables of this study include. ? Market capitalization: This is also called the market cap. It is the market value of a publicly traded company’s outstanding shares. Market capitalization is equal to the share price multiplied by the number of the shares outstanding. It could be used as an indicator of public opinion of a company net worth and is a determining factor in some forms of stock valuation. ? Volume of transaction: This is the number of shares or contracts traded in a security or an entire market during a given period. For every buyer, there is a seller, and each transaction contributes to the count of total volume. That is, when buyers and sellers agree to make a transaction at a certain price, it is considered one transaction. If only five transactions occur in a day, the volume for the day is five. ? Total new issues: They are sometimes referred to as primary shares or new offering. The term does not necessarily refer to newly issued stocks, although initial public offerings (IPOS) are the most known new issues. ? Total listed equity: This is a financial instrument that is traded through an exchange. The listing requirements vary by exchange and include minimum stockholders’ equity, a minimum share price and a minimum number of shareholders. 1.7 Significance of the Study This research work is intended to be great significance to the public and it will create an understanding to the nature of capital market and its contributions to the economic development in Nigeria and the world over. • To the corporate bodies, especially those whose shares are quoted on the floor of the Nigeria stock exchange, they will find this research work important as they carry out their day-to-day business operations in the Nigeria capital market. • To academia, this research work essentially intends to contribute significantly to the volume of literature available in this area of finance. In academics, the unknown is never exhausted as the list of what we do not know could go on forever. • To the government, this research work enables the government to know the impact of government bonds in financing long-term project for the growth of the economy. • To the regulatory authorities, they find this research work important as they oversee all firms that are in the securities business with the public. They see to the training of financial services professionals, licensing and testing agencies and overseeing the mediation and arbitration process for disputes between customers and brokers. 1.8 Organization of the Study This work is divided into 5 chapters. These chapters contain every information and details concerning the operations of capital market and economic growth in Nigeria for the period of 1995-2016. Chapter one talks about the background of study, statement of problem, objectives of the study, research questions, research hypothesis, scope of the study etc. chapter two (2) states the review of related literature. It contains the preview, conceptual review, theoretical review, empirical review, research gap and so on. Chapter three (3) contains the research methodology. It comprises of the preview, research design, sources of data, methods of data analysis, model specification etc. Chapter four is the data presentation, analysis and interpretation of results. Chapter five centres on the summary, conclusion and recommendations. 1.9 Operational Definition of Terms i. Investors: People who buy property, shares in a company with the hope of making profit. ii. Interest: Refers to a change made by a lender to a borrower in exchange of funds. iii. Capital: A term for financial assets or their financial value eg funds held in deposit account as well as the tangible factors of production used in environments such as factories and other manufacturing facilities. REFERENCES • AL. FAKI, M (2007): Understanding the Nigeria capital market reforms in Nigeria. A incremental Approach’. Paper presented at 46th Annual conference of the Nigeria economic society in Lagos in August 2015. • OTCHERE 1 & SENBET, LW. (2005): African Financial system: A region, development finance (2011) • JUWAH-OGBOI, C. (2018): 10 Problems of the Nigerian capital markets and possible solutions: www.infoguidenigeria.com/problem-nigeriacapital-market/ n • ROSS LEVINE, SARA ZERVOS, (1998), stock market, banks and economic growth. The American economic view. Vol. 88, No.3 (1998) Page 537-558 (Journal).