Analysis of the Effect of Abundance Natural Resources on Private Sector Investment through the Economic Freedom in Selected Countries of Petroleum Exporting

Investment shows a combination of demand of firms and supply household savings and due to the volatile nature reflects short-term fluctuations in the economy of any country. This study examines the effect of abundance natural resources on private sector investment through the economic freedom and five main index (government's size, the structure of property rights, access to sound money, freedom of foreign trade and regulations), in the selected countries of the petroleum exporting for the period 2000-2012. Statistical society to be formed from fifteen groups of oil exporting countries as a sample group and fifteen members of developed countries of OECD as a control group. The research model using panel data and the generalized method of moments (GMM) estimated. The estimation results reflect the negative impact of the government's measure private sector investment in both countries has chosen. Abundance of natural resources regulations as well as channel indicator on private sector investment in developing countries has a significant positive impact and in oil-exporting countries have had a significant negative impact. Meanwhile, abundance of natural resources through the index of economic freedom, freedom of foreign trade, the structure of property rights, access to sound money in both groups of countries have had a significant positive effect on private sector investment.