Impact of digital finance on the performance of the stock market in Nigeria
Abstract
This research analyses the influence of digital finance on the performance of the Nigerian stock market from 2009 to 2023. This study examines the impact of Automated Teller Machine (ATM) transactions, Point of Sale (POS) transactions, mobile payment transactions, and online payment transactions on stock market capitalisation in Nigeria. The research employs an ex-post facto design and utilises secondary time series data obtained from the Central Bank of Nigeria Statistical Bulletin. Descriptive and inferential statistics, including multiple regression analysis, were employed to examine the data. The results demonstrate a robust and significant correlation between digital finance and stock market success. Web pay transactions have the most substantial positive impact on market capitalisation, indicating that online payment methods augment investor engagement and stock market expansion. Conversely, ATM and mobile payment transactions exhibit adverse effects, suggesting possible inefficiencies or restricted integration with stock market operations. POS transactions exhibit a modest yet favourable impact on stock market capitalisation. The research finds that digital finance is essential for advancing stock market growth in Nigeria. It advises that governments and financial institutions policy makers should deepen digital finance platforms with capital market services, augment infrastructure, and elevate digital literacy to optimise the advantages of digital finance for stock market performance.
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Adewale, A. A., & Adewole, J. A. (2024). Stock market indicators and the Nigerian economy. Jurnal Akuntansi Universitas Jember, 22(2), 218–237. https://doi.org/10.19184/jauj.v22i2.46740
Adewole, J. A., Omotayo, V. A., Adewale, A. A., & Kadiri, K. I. (2023). Stock Market Capitalisation and Economic Growth in Nigeria (1991 – 2021). Journal of Management and Social Sciences, 12(1). https://doi.org/10.53704/jmss.v12i1.456
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Durai, T., & Stella, G. (2019). Digital finance and its impact on financial inclusion. Journal of Emerging Technologies and Innovative Research, 6(1), 122-127.
Gbanador, M. A. (2023). The effect of cashless policy on economic growth in Nigeria: An autoregressive distributed lag approach. Asian Journal of Economics, Business and Accounting, 23(6), 22-31.
Goodman, P. (2018). 16 advantages of digital technology. https://turbofuture.com/computers/Advantages-of-Digital-Technology
Igoni, S., Onwumere, J. U. J., & Ogiri, I. H. (2020). The Nigerian digital finance environment and its economic growth: Pain or gain. Asian Journal of Economics, Finance and Management, 2(2), 1-10.
Isamade, B. A., Udeh, S. N., & Allison, P. (2022). Effect of e-payment systems on the gross domestic product of Nigeria. British International Journal of Applied Economics, Finance and Accounting, 6(3), 24-40.
Kuvshinov, D., & Zimmermann, K. (2022). The big bang: Stock market capitalization in the long run. Journal of Financial Economics, 145(2), 527-552.
Meena, M. R., & Parimalarani, G. (2020). Impact of digital transformation on employment in the banking sector. International Journal of Scientific and Technology Research, 9(1), 4912-4916.
Okoyeuzu, C., & Isa, K. D. (2020). What type of investment does digital finance promote: speculative or non-speculative? International Journal of Economics and Financial Issues, 1(4), 237-246.
Organisation for Economic Co-operation and Development. (2018). G20/OECD INFE policy guidelines on digitalization and financial literacy. www.oecd.org/going-digital
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340.
Ozili, P. K. (2020). Comparing digital finance in the US, UK, India, and Nigeria. Financial Internet Quarterly. 16(4), 1-11. https://doi.org/10.2478/fiqf-2020-0023
Ozili, P. K. (2023). Digital finance research and developments around the World: A literature review. International Journal of Business Forecasting and Marketing Intelligence, 8(1), 35-51.
Qamruzzaman, M., & Wei, J. (2018). Financial innovation, stock market development, and economic growth: An application of the ARDL model. International Journal of Financial Studies, 6(69), 1-30. https://doi.org/10.3390/ijfs6030069.
Ravikumar, T. (2019). Digital financial inclusion: A payoff of financial technology and the digital finance uprising in India. International Journal of Scientific and Technology Research, 8(11), 3434- 3438.
S., Ogiri, I. H., & Boloupremo, T. (2021). The link between electronic transactions and stock market performance in the Nigerian financial ecosystem. International Journal of Advanced Engineering Research and Science, 8(1), 262-271. https://dx.doi.org/10.22161/ijaers.81.36
Shofawati, A. (2019). The role of digital finance in strengthening financial inclusion and the growth of SME in Indonesia. The 2nd International Conference on Islamic Economics, Business, and Philanthropy. KnE Social Sciences, 389–407. https://doi.org/10.18502/kss.v3i13.4218
Uduk, M. (2018). Digitization, disruption, and financial inclusion: Digital finance as an essential tool for enhancing financial inclusion [Keynote address]. 3rd annual market data day of the Nigerian Stock Exchange, Victoria Island, Lagos.
Adewale, A. A., (2024). The Impact of Electronic Banking Channels on The Financial Inclusion in Nigeria. Gomal University Journal of Research, 40(4), 426-441. https://doi.org/10.51380/gujr-40-04-03
Adewale, A. A., & Adewole, J. A. (2024). Stock market indicators and the Nigerian economy. Jurnal Akuntansi Universitas Jember, 22(2), 218–237. https://doi.org/10.19184/jauj.v22i2.46740
Adewole, J. A., Omotayo, V. A., Adewale, A. A., & Kadiri, K. I. (2023). Stock Market Capitalisation and Economic Growth in Nigeria (1991 – 2021). Journal of Management and Social Sciences, 12(1). https://doi.org/10.53704/jmss.v12i1.456
Alshubiri, F., Jamil, S. A., & Elheddad, M. (2019). The impact of ICT on financial development: Empirical evidence from the Gulf Cooperation Council countries. International Journal of Engineering Business Management, 11, 1–14. https://doi.org/10.1177/1847979019870670
Durai, T., & Stella, G. (2019). Digital finance and its impact on financial inclusion. Journal of Emerging Technologies and Innovative Research, 6(1), 122-127.
Gbanador, M. A. (2023). The effect of cashless policy on economic growth in Nigeria: An autoregressive distributed lag approach. Asian Journal of Economics, Business and Accounting, 23(6), 22-31.
Goodman, P. (2018). 16 advantages of digital technology. https://turbofuture.com/computers/Advantages-of-Digital-Technology
Igoni, S., Onwumere, J. U. J., & Ogiri, I. H. (2020). The Nigerian digital finance environment and its economic growth: Pain or gain. Asian Journal of Economics, Finance and Management, 2(2), 1-10.
Isamade, B. A., Udeh, S. N., & Allison, P. (2022). Effect of e-payment systems on the gross domestic product of Nigeria. British International Journal of Applied Economics, Finance and Accounting, 6(3), 24-40.
Kuvshinov, D., & Zimmermann, K. (2022). The big bang: Stock market capitalization in the long run. Journal of Financial Economics, 145(2), 527-552.
Meena, M. R., & Parimalarani, G. (2020). Impact of digital transformation on employment in the banking sector. International Journal of Scientific and Technology Research, 9(1), 4912-4916.
Okoyeuzu, C., & Isa, K. D. (2020). What type of investment does digital finance promote: speculative or non-speculative? International Journal of Economics and Financial Issues, 1(4), 237-246.
Organisation for Economic Co-operation and Development. (2018). G20/OECD INFE policy guidelines on digitalization and financial literacy. www.oecd.org/going-digital
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340.
Ozili, P. K. (2020). Comparing digital finance in the US, UK, India, and Nigeria. Financial Internet Quarterly. 16(4), 1-11. https://doi.org/10.2478/fiqf-2020-0023
Ozili, P. K. (2023). Digital finance research and developments around the World: A literature review. International Journal of Business Forecasting and Marketing Intelligence, 8(1), 35-51.
Qamruzzaman, M., & Wei, J. (2018). Financial innovation, stock market development, and economic growth: An application of the ARDL model. International Journal of Financial Studies, 6(69), 1-30. https://doi.org/10.3390/ijfs6030069.
Ravikumar, T. (2019). Digital financial inclusion: A payoff of financial technology and the digital finance uprising in India. International Journal of Scientific and Technology Research, 8(11), 3434- 3438.
S., Ogiri, I. H., & Boloupremo, T. (2021). The link between electronic transactions and stock market performance in the Nigerian financial ecosystem. International Journal of Advanced Engineering Research and Science, 8(1), 262-271. https://dx.doi.org/10.22161/ijaers.81.36
Shofawati, A. (2019). The role of digital finance in strengthening financial inclusion and the growth of SME in Indonesia. The 2nd International Conference on Islamic Economics, Business, and Philanthropy. KnE Social Sciences, 389–407. https://doi.org/10.18502/kss.v3i13.4218
Uduk, M. (2018). Digitization, disruption, and financial inclusion: Digital finance as an essential tool for enhancing financial inclusion [Keynote address]. 3rd annual market data day of the Nigerian Stock Exchange, Victoria Island, Lagos.
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