Stock Market Liquidity and Investment Decisions of Non-Financial Quoted Companies in Nigeria


  • Rafiu Oyesola Salawu Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife, Nigeria
  • Segun Wale Olayinka Department of Accountancy, The Polytechnic Ibadan, Nigeria


Stock Market Liquidity, Investment Decisions, Firms Value


The study examined the impact of market liquidity on investment decision of 50 non-financial quoted companies in Nigeria between 2006 and 2012. The study employed secondary source of data collection. Data collected were analyzed using descriptive statistics and inferential statistics such as pool OLS and fixed effect model. The results showed that Size of the Firm (FS) and Firms’ Age (FAGE) were the only significant determinants of Return on Investment (ROI). The turnover ratio (TOR) which is a proxy for market liquidity had positive but insignificant effect on ROI. Based on the above findings, the study concluded that for most of the companies operating in the non-financial sector of the Nigerian economy, the influence of market liquidity on investment decision is positive, but not significant. The study recommended that management should place more emphasis on the firm age and in particular firm size as they can be employed to predict the return on investment.


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