Potential and Opportunity for Foreign Direct Investment in Thailand

Running Head: POTENTIAL AND OPPORTUNITY FOR FOREIGN DIRECT INVESTIMENT IN THAILANDi
POTENTIAL AND OPPORTUNITY FOR FOREIGN DIRECT INVESTIMENT IN THAILAND
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POTENTIAL AND OPPORTUNITY FOR FOREIGN DIRECT INVESTIMENT IN THAILAND ii
Executive summary
Globalization is currently occurring at a fast pace in today’s world of business. Many
nations have realized the value of international trade and have supported their individual
businesses to venture into it (Archibugi & Iammarino, 2012). Also various nations are trying
their best to attract and maintain foreign direct investments in their economies to foster their
economic performance and access goods and services which they lack competitive advantage in
producing. Thailand is among the best performing nations in the Asia-Pacific region with great
potential and opportunity for foreign direct investments. Foreign direct investment in Thailand is
a crucial element which contributes much towards improving its economic performance.
Currently estimates show that foreign direct investment accounts for more than 50 percent of the
total exports of Thailand. This report aims at accessing the potential and the opportunity of
Thailand to attract and maintain foreign direct investments based on various factors which
include Political, Economic, Socio-cultural and Technological Influences, Natural resource
competitive advantage, Foreign currency and exchange influences, Thailand trade policies,
barriers and incentives and the existing levels of foreign direct investments.

Running Head: POTENTIAL AND OPPORTUNITY FOR FOREIGN DIRECT INVESTIMENT IN THAILANDiii
Table of Contents
Executive summary.......................................................................................................................................ii
Introduction....................................................................................................................................................1
Political, Economic, Socio-cultural and Technological Influences...............................................................2
National resource competitive advantage......................................................................................................4
Foreign currency and exchange influences....................................................................................................4
Thailand trade policies, barriers and incentives.............................................................................................5
Existing levels of foreign direct investment..................................................................................................6
Summary and recommendations....................................................................................................................7
References......................................................................................................................................................8

Running Head: POTENTIAL AND OPPORTUNITY FOR FOREIGN DIRECT INVESTIMENT IN THAILAND1
Introduction
Thailand is among the richest nations in the Asia-Pacific region. It embraces a free
economy with most of its economic policies targeting on improving trade openness in the
country. It has been ranked position 53 by the 2018 index in terms of economic freedom with a
score of 67.1.Investment and business freedom scores have improved to 55.0 and 77.2
respectively and this has led to the general improvement in economic freedom of the nation by
0.9 points. In terms of economic performance of the Asia-Pacific region nations, Thailand has
been ranked position 12 out of the 43 nations in the region. The economic performance of
Thailand is above the expected average score both at the regional and world at large
(Phongpaichit & Baker, 2015).
Foreign direct investment occurs when firms and individuals from other nations invest in
targeted business interests in another country. It usually takes place as nations invest or rather
trade across their national boundaries. Today’s world of business has become more globalized.
Many businesses have realized the various benefits associated with international trade and with
the support of their governments, they have moved a step further in terms of trade and invested
in foreign nations of interest (Cavusgil et al, 2014). Various nations have also encouraged
foreign direct investments in their economies. This has been done through implementation of
foreign direct investment supportive economic policies in order to attract and maintain more
foreign investors and foster their economic growth and also benefit much from products which
they have no comparative advantage in terms of production.
Foreign direct investment in Thailand is a crucial element which has been contributing
much towards improving its economic performance. Thailand is one of the nations which have