Tansian University Journal of Arts, Management & Social Sciences

Financial markets provide an effective means of mobilizing short and long term capital resources from lender and allocating them to the real sector of the economy. The study analyzed financial market instruments and economic development in Nigeria. The study determined the effect of stock market instruments on standard of living in Nigeria. The study also examines the effect of debt instruments on standard of living in Nigeria. It further ascertained the effect of commercial instruments on standard of living in Nigeria. Econometric methods including Augmented Dickey filler and Philip Perron tests for unit roots and Ordinary Least Squares (OLS) were used in the analysis. The result of the study had shown that stock market instruments, debt instrument, commercial instruments and treasury instruments have positive and significant effect on per capita income. The study concludes that financial market instruments have positive and significant effect on standard of living of average Nigerian citizens. We recommend that regulatory agencies in the capital market should focus on enhancing the efficiency and transparency of the market in order to improve investors confidence. Government should give adequate publicity to the activities of the market most especially emphasizing it as a source of cheap long term funds.

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