Corporate Governance, Social Trust, and Financial Market Development in Nigeria: A New Institutional Economics Perspective

This dissertation examines the co-evolutionary relationship between corporate governance quality, social trust endowments, and financial market development in Nigeria, applying a new institutional economics theoretical lens. Financial market development, encompassing stock market depth, bond market activity, and banking sector intermediation efficiency, is theorised to depend not only on technical regulatory infrastructure but on the governance trust ecosystem within which financial transactions occur. Nigeria presents a compelling research context given significant regional variation in social trust levels, governance quality, and financial market participation across its six geopolitical zones. Drawing on North's institutional economics framework, Putnam's social capital theory, and the finance-development nexus literature, this study develops a three-way co-evolutionary governance model and tests it using a combination of zone-level panel data on financial market depth indicators over fifteen years and firm-level governance quality scores for sixty listed firms. Social trust is measured using data from three waves of the Afrobarometer survey. Structural vector autoregression is applied to model dynamic co-evolutionary relationships among the three constructs. The study addresses a significant theoretical gap by integrating social capital and governance quality into a unified institutional explanation of Nigeria's financial market development trajectory. Original contributions include the co-evolutionary governance model, zone-level institutional mapping, and empirical identification of causal pathways. Findings carry important implications for capital market development policy. Keywords: corporate governance, social trust, financial market development, new institutional economics, Nigeria.