Determinants of the Foreign Direct Investment in Thailand

Aduldech Klong Klaew, Behrooz Gharleghi, Tan Hui Min and Benjamin Chan Yin Fah

The purpose of this study is to identify the major challenges toward inward foreign direct investment in Thailand by examining some critical factors. According to the UNCTAD World Investment Report 2013, Thailand was among the 8 priority destinations for foreign investment for the period of 2013-2015, gaining fourth place in the previous year. As a result, Thailand is an important destination of Foreign Direct Investment. Thailand has always been referred to as a developing country which has been successful in pursuing an export-led growth strategy (Brimble and Sibunruang, 2002). Although, Thailand is one of the best countries to invest on the business by foreigners, at the same time there are some factors that may challenge the foreign investors such as management of Thai’s government, complexity of commercial law in the country and the problem of marketing system. A quantitative research approach is carried out to identify the significance of the above factors toward inward FDI. Self-administrated questionnaire distributed through convenient non-probability random sampling method to collect the data for above challenges and finally 197 usable questionnaires out of 220 is utilized to obtain the results. Reliability test, Pearson correlation test, and regression analysis were implemented to identify the relationship among these variables. The results indicate that poor management as well as complexity of commercial law are the major challenges faced by investors. While marketing system found to be insignificant.

DOI : https://doi.org/10.21102/graf.2016.09.72.10