Foreign direct investment in Thailand

Masters thesis

Kunpalin, A. 1986. Foreign direct investment in Thailand. Masters thesis Middlesex University Business School
TypeMasters thesis
TitleForeign direct investment in Thailand
AuthorsKunpalin, A.

This study of foreign direct investment (FDI) in Thailand fills a gap since no such studies exist for Thailand. After an introduction to Thailand's economy, the thesis presents a brief survey of the theories of FDI with reference to the less-developed countries. It is followed by a study of the country-wise and sector-wise pattern of FOI in Thailand. The next two chapters carry out empirical tests of the capital-intensity hypothesis and the raw-material availability hypothesis respectively. Both the hypotheses are found to be statistically acceptable in the case of Thailand. This is followed by a simple test of the tariff-jumping hypothesis which does not explain FOI in Thailand. This should be viewed with caution as only nominal rates (as opposed to effective rates of protection) are used. Then, a test of a joint hypothesis (capital intensity, raw-material availability, and tariff rates) confirms the relative prominence of the capital- intensity hypothesis. The relative wage-cost hypothesis (i.e., Thai wage-rates relative to the Japanese and West German
wage-rates) is found to be statistically unacceptable in the case of Thailand. lastly, welfare effects of FOI are examined. A brief survey of the literature and a critical appraisal have been presented. So far as Thailand is concerned, the general weight of the various arguments leans to the conclusion that foreign direct investments have ameliorative effects. This conclusion is based on (i) an
analytical examination of the welfare implications of Thailand's over-all pattern of FOI, (ii) a statistical analysis of the acroeconomic effects, (iii) an analysis of the environmental issues by examining the chemical properties of the products produced by foreign firms in the Chemical Sector, and (iv) a study of the desired pattern of
investment in the Thai economy as envisaged in the Five Year
Plans and the ex post sectoral pattern of FOI.

Department nameBusiness School
Institution nameMiddlesex University
Publication dates
Print03 Oct 2014
Publication process dates
Deposited03 Oct 2014
CompletedJan 1986
Output statusPublished
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