THE DETERMINANTS OF FOREIGN DIRECT INVESTMENT FLOWS TO THAILAND
DOI:
https://doi.org/10.22452/Keywords:
Foreign Direct Investment, Thailand, ARDL model, Toda-Yamamoto causality, Political stabilityAbstract
Foreign direct investment (FDI) has played a vital role in Thailand's industrialisation and economic growth. This study examines the determinants of FDI inflows in Thailand over the period 1990–2019, focusing on natural resources, political risk, labour force, financial development, market size, and macroeconomic stability. The Autoregressive Distributed Lag (ARDL) approach is employed to estimate the long-run and short-run relationships, while the Toda–Yamamoto causality test examines causal linkages among the variables. The results reveal that natural resources and financial development have positive and significant effects on FDI inflows, whereas political risk exerts a significant negative effect. In contrast, labour force, market size, and macroeconomic stability do not significantly influence FDI during the study period. The findings highlight the importance of strengthening political stability, deepening financial sector development, and sustainably managing natural resources to enhance Thailand's investment attractiveness and support long-term economic growth.
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