Purpose: The purpose of this study is to examine specifically the impact of competing financial structure theories on economic growth in Nigeria.

Design/methodology/approach: The study used time series data for a 17 year period: 1992-2008, to fill this important research gap. The study used the Ordinary Least Square regression approach to estimate the formulated models in line with financial structure theories. The growth rate of the gross domestic product per capita was adopted as the dependent variable, while the independent variables include; conglomerate index of bank-based financial structure; conglomerate index of market-based financial structure, conglomerate index of financial service-based financial structure; and the conglomerate index of the legal-based financial structure.

Findings: The regression results showed that the coefficients of bank-based theory and legal-based theory were positive in promoting economic growth, while the regression coefficients of market-based theory and the financial service theory were negative in promoting economic growth.

Research Limitations/Implications: Paucity of substantial local literature on financial structure and economic growth constitute the major limitation of this study. Although, this study is meant to close this gap, the implication is that foreign theoretical and empirical literature standpoint constitutes the bulk of the review, which may not explain reasons for any identifiable local trends in the Nigerian financial structure.

Practical Implication: The study recommends that policy makers should focus their attention on legal, regulatory and policy reforms that encourage the proper functioning of banks, rather than concern themselves with banks and market reforms.

Originality/Value: This study contributes to financial structure literature for developing economies by using data from Nigeria. Specifically, the findings reveal that for developing economies, bank-based financial structure is better in promoting growth.