THE IMPACT OF FOREIGN DIRECT INVESTMENT ON THE CHANGE IN THAILAND'S INDUSTRIAL STRUCTURE

Yan Xuchong

Abstract


Foreign direct investment (FDI) has played a significant role in Thailand's economic development. This study utilizes the Vector Error Correction Model (VECM) to analyse the impact of FDI on the change in Thailand's industrial structure. Based on the analysis results of the VECM model, it is evident that the impact of FDI on these changes is slightly smaller than that of the industrial structure itself; it is also positive. Both the industrial structure itself and FDI have long-term positive promoting effects on the change in Thailand's industrial structure. Furthermore, the impact of GDP per capita, imports and exports on changes in the industrial structure is subject to volatility. Initially, GDP per capita, imports, and exports had a short-term positive promoting effect on Thailand's industrial structure change. However, in the long term, the growth of these two economic factors constrains the change in Thailand's industrial structure.

 

JEL: F21; O14; O53; C32; L52

 

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Keywords


Thailand, foreign direct investment, industrial structure changes, vector error correction model, long-term effect

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References


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DOI: http://dx.doi.org/10.46827/ejefr.v8i3.1708

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