Investigating Long-Run Co-Movements betweenłdots 1 INVESTIGATING LONG-RUN CO-MOVEMENTS BETWEEN EMERGING AND DEVELOPED STOCK MARKETS

OBADIARU, ESEOSA DAVID and Oloyede, J.A. and OMANKHANLEN, Alex Ehimare (2021) Investigating Long-Run Co-Movements betweenłdots 1 INVESTIGATING LONG-RUN CO-MOVEMENTS BETWEEN EMERGING AND DEVELOPED STOCK MARKETS. Finance and Banking Review, 15 (1). pp. 1-14.

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Abstract

Stock markets are increasingly becoming more interdependent due to internationalization and the ever increasing level of financial globalization. The aim of the study is to empirically investigate if there is a long-run relationship between the Nigerian Exchange Limited and some emerging and developed economies using the Johansen cointegration technique. Major market indexes were selected to represent each market. A significant long-run relationship was found between most of the markets in the West African region and their global counterpart. Meanwhile an insignificant long-run relationship was found among the West African stock markets. The findings imply that diversification opportunities exist more amongst equity markets in the West African region than with major global equity markets. The study recommends that the formal stock market integration process should be fostered while more efforts should be made to make the markets more resilient against negative global equity flows.

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