Financial malpractices and stock market development in Nigeria: An exploratory study
Abstract
Purpose
The purpose of this paper is to investigate if the prevalence of corruption and other unwholesome financial practices in Nigeria contributed substantially to the stunted growth of the capital market in general, and the stock market in particular.
Design/methodology/approach
The paper employed Gregory–Hansen cointegration approach to test the long-run equilibrium relationship between the occurrence of predatory banking practices and stock market capitalization in Nigeria.
Findings
There exists a long-run equilibrium relationship between bank fraud and stock market capitalization but with a structural break in 2005.
Practical implications
There is an urgent need to overhaul and re-assess from time to time the existing systems of internal checks and controls in banks, as well as other financial institutions in Nigeria.
Originality/value
This paper is the first to empirically test the long-run equilibrium relationship between bank fraud and stock market capitalization in Nigeria.
Keywords
Citation
Thompson Ojo, A. and Felix Ayadi, O. (2014), "Financial malpractices and stock market development in Nigeria: An exploratory study", Journal of Financial Crime, Vol. 21 No. 3, pp. 336-354. https://doi.org/10.1108/JFC-05-2013-0034
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited