Review of the Impact of Bank and Market Based Financial Structure on Economic Growth in Nigeria

The study reviewed the impact of bank and market based financial structure on economic growth in Nigeria for the period 1990-2012. The objectives of the study were to determine the impact of bank-based financial structure, market-based financial structure and total financial services on economic growth. The study used “Expost-facto” research design. Ordinary Least Square Regression model was used in data analysis. The study finds that market-based financial structure has negative and insignificant impact on economic growth while bank-based financial structure and total financial services have positive and significant impact on economic growth. The implication of the finding is that the Nigerian financial structure is bank-based and not market-based. It also implies that total financial service is significant to economic growth; hence, financial structure classification is irrelevant. It was recommended that efforts should be intensified to ensure greater provision of total financial services to the domestic economy. Efforts should be geared towards revamping the Nigerian Capital Market activities as a way of encouraging its contribution to economic growth. Keywords: Market size, Bank activity, AK growth theory, Total financial service