Natural resources, export structure, and investment

We present cross-country empirical evidence on the role of natural resources in explaining long-run differences in private investment as a share of GDP in a sample of 78 developing countries. Our empirical results suggest important differences between fossil fuels and non-fuel resources. While signi...

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Bibliographic Details
Published in:Oxford economic papers 2009-10, Vol.61 (4), p.675-702
Main Authors: Bond, Stephen R., Malik, Adeel
Format: Article
Language:English
Subjects:
Capital investments
Commodities
Developing countries
E22
Economic resources
Economic theory
Endowment
Environmental economics
Exports
F15
Financial investments
Fossil fuels
GDP
Gross Domestic Product
Investment
Investment theory
LDCs
Macroeconomics
Mineral resources
Multiculturalism & pluralism
Natural resources
O16
OECD countries
Political systems
Private investment
Public investments
Resource exploitation
Studies
Symposium on resource rich economies
Volatility
Wealth
World Bank
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Summary:We present cross-country empirical evidence on the role of natural resources in explaining long-run differences in private investment as a share of GDP in a sample of 78 developing countries. Our empirical results suggest important differences between fossil fuels and non-fuel resources. While significant fuel exports tend to increase private (and public) investment, there is also a robust negative effect from a measure of export concentration. After controlling for these two aspects of export structure, there is little additional information in other natural resource indicators, or in other suggested investment determinants, such as measures of the quality of institutions, political instability or macroeconomic volatility.
ISSN:0030-7653
1464-3812
DOI:10.1093/oep/gpp025