[01] Alayemi Sunday Adebayo, The Federal Polytechnic, School of Business and Management Studies, Department of Accountancy, Nigeria.

The study evaluated the relationship between market capitalization and macroeconomic variables, in emerging market. In the study all the entire companies whose shares were traded on the Nigerian Stock Exchange were studied from 1988 -2012 spanning a period of 25 years. Data were collected from the stock exchange market and Federal office of statistics. The main objective of the study is to evaluate the relationship between market capitalization and macroeconomic variables. The specific objectives from the main objective is to evaluate the relationship between market capitalization and each of the components of macroeconomic variables, that is, interest rate, inflation rate, lending rate, gross domestic product and unemployment rate. The overall result revealed that macroeconomic variables are the drivers of market capitalization. Multiple regressions were employed to investigate the relationship between market capitalization and components of macroeconomic variables. The results showed that there was negative effect of interest rate, inflation rate, lending rate and unemployment on market capitalization at varying degree. In the final analysis, the result showed that there was relationship but not significant between market capitalization and components of microeconomic variables.

Market Capitalization, Nigerian Stock Exchange, Macroeconomic Variables, Interest Rate, Inflation Rate

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