Explaining Corss-country Variation in Investment: The Role of Endowments, Institutions and Finance.

Working paper

We present empirical evidence on factors that explain long run differences in investment as a share of GDP in a sample of 61 developing countries. We find robust positive effects from measures of the quality of political institutions and public sector infrastructure provision, and robust negative effects from measures of natural resource endowments. There is little additional information in measures of political instability or macroeconomic volatility when we control for these factors. Financial development is found to have a positive influence on investment shares only in countries that experienced relatively high volatility.

Authors: Bond, S; Malik, A

• Publisher: CSAE (University of Oxford)
• Publication date: 2007-01-01
• Language: English