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 72 developing countries. Our empirical results suggest important differences between oil and non-oil resources. While revenue from oil exports tends 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 measures of resource abundance, or in other suggested investment determinants, such as measures of the quality of institutions, political instability or macroeconomic volatility.