Skip to main content Accessibility help
×
Home
Hostname: page-component-684899dbb8-mhx7p Total loading time: 0.356 Render date: 2022-05-23T06:29:02.753Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "useRatesEcommerce": false, "useNewApi": true }

7 - Factors Influencing Thailand's Outward FDI

Published online by Cambridge University Press:  19 May 2017

Kornkarun Cheewatrakoolpong
Affiliation:
Chulalongkorn University, Bangkok
Panutat Satchachai
Affiliation:
Chulalongkorn University
Get access

Summary

INTRODUCTION

Inward foreign direct investment (FDI) has been one of the important driving forces for Thailand's economic growth during the last few decades. Thailand is an important production and assembly base in Southeast Asia for many industries such as automobiles and hard disk drives. The country has attracted tremendous investments from multinational enterprises based in developed countries such as Japan, the European Union, and the United States. FDI was a crucial factor behind the miraculous economic growth in Thailand and East Asian countries during the 1990s (Jansen 1995; Chen and De Lombaerde 2009). The more recent study by Cheewatrakoolpong and Sabhasri (2012) showed that FDI from developed countries leads to technology transfers and knowledge spillovers as well as promoting employment, productivity and international trade in Thailand.

Given Thailand's status as a middle-income country with significant inward FDI, what explains outward FDI (OFDI) from Thailand? The goal of this study is to examine the factors influencing Thailand's OFDI. It analyses the determinants of Thailand's OFDI in ASEAN-5 and CLMV countries. In addition, this study also investigates the opportunities and effects of adopting ACIA on Thai economy. Finally, this study will consider two case study sectors, namely food processing, and textile and garments. Both are among the prioritized sectors for Thailand's OFDI.

OFDI AND THE FLYING GEESE THEORY

Kojima (1975) proposed the “Flying Geese Theory” to explain Japan's OFDI in the region. The theory attempts to explain Japan's OFDI into the newly industrialized countries such as Singapore, Hong Kong, South Korea and Taiwan in the 1960s. In the more recent study, Aminian, Foong and Hitomi (2007) have argued that the cost of production has increased in Singapore, Hong Kong, South Korea and Taiwan. This has led to a loss of competitive advantage which could have resulted in investment being relocated to countries with lower cost of production such as Malaysia, Thailand and Indonesia. Hiratsuka (2006) has argued that the flying geese theory can be used to explain the recent OFDI in Malaysia, Thailand and Indonesia.

Type
Chapter
Information
Publisher: ISEAS–Yusof Ishak Institute
Print publication year: 2017

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×