Policy and Foreign Direct Investment : Case Study of Thailand’s Automotive Industry

Policy and Foreign Direct Investment : Case Study of Thailand’s Automotive Industry

Loading document ...
Page
of
Loading page ...

Author(s)

Author(s): Titapa Tanchoun

Download Full PDF Read Complete Article

DOI: 10.18483/ijSci.1566 368 590 1-7 Volume 7 - Mar 2018

Abstract

Thailand’s automotive industry has derived over the past 50 years, perpetually supported by government investment, taxation, and the promotion of foreign direct investment. However, the economic crisis (Tom Yam Kung) caused the worst downturn in Thailand. After the crisis, Thailand set policies to strengthen the potential of the automotive industry and implemented measures to promote the manufacture and utilisation of domestic automotive parts, such as an increase in import tax on Complete Built-Up (CBU) and Complete Knock-Down (CKD) to support foreign investment in Thailand’s production base, such as exemption from corporate tax income and the import duty on machinery. Furthermore, the government determined an increasing requirement ratio for local content. Consequently, Thailand has the biggest production base in Southeast Asia; the first of its kind for pickup trucks in the world, and ranked twelfth for exports of automobile and automotive parts. Meanwhile, Thailand continues to develop its major goal to become a top ten exporter of the automotive industry in the world.

Keywords

Foreign Direct Investment, Industrial Policy, Thailand, Automotive Industry

References

  1. Amelia U. Santos-Paulino, “The Asian Economic Integration Cooperation Agreement: lessons for economic and social development,” UNCTAD Research Paper,No. 3.2017.
  2. Ampassacha R, “FDI Trends, Pull Factors and Policies in Thailand,”International Institute of Social Studies, December 2016.
  3. Archanun K., “Thai Automotive Industry: Multinational Enterprises and Global Integration,”Economic Research and Training Center Thammasat University, 25 February 2008.
  4. Bank of Thailand, “Statistics Database”. Retrieved January 8 2017, From https://www.bot.or.th/English/Statistics/Pages/default.aspx.
  5. Bevan,A.A. and S.Estrin, “The Determinants of Foreign Direct Investment into European Transition Economies”,Journal of Comparative Economics, 32(4),p.775.2004.
  6. Biswas, R., “Determinants of Foreign Direct Investment”, Review of development Economics,6(3),p.492-504.2002.
  7. Doner R., “The Politics of Uneven Development, Cambridge University Press.2009.
  8. Hirono, R.,“Industrial Restructuring and Adjustment for ASEAN-Japan Investment and Trade Expansion: An Overview”,Institute of Southeast Asian.1987.
  9. Hua Wang,“Policy Reforms and Foreign Direct Investment: The Case of the Chinese Automobile Industry”, Journal of Economics and Business,Vol. 6 , No 1, p.287 –314.2003.
  10. Javorcik, Beata Smarzynska, “Does Foreign Direct Investment Increase the Productivity of Domestic Firms? Is Search of Spillovers Through Backward Linkages”,American Economic Review,2004(3),p.605-627.
  11. Li peishan.“Research on the effect of FDI on technology innovation of Thailand vehicle joint venture”,Guangxi University.2015.
  12. Long guoqiang. “The Development of Automotive Industry - Thailand Automotive Industry and Industrial Policy”,China Academic Journal Electronic Publishing House,Vol 8,p.39-42.1997.
  13. Mai Fujita(1997). Industrial Policies And Trade Liberalization The Automotive Industry In Thailand and Malaysia, APEC Study Center Institute of Developing Economics.
  14. Moran, T.H., “Foreign Direct Investment and Development: the New Policy Agenda for Developing Countries and Economies in Transition”, Institute for International Economics, Washington, DC.1998.
  15. Moran, T.H., “Parental Supervision: The New Paradigm for Foreign Direct Investment and Development”, Institute for International Economics,Washington, DC.2001.
  16. P. Wad and V.G.R.C. Govindaraju, “Automotive industry in Malaysia: an assessment of its development”, International Journal of Automotive Technology and Management, Vol. 11, No. 2,p.152-171.2011.
  17. Razeen Sally, “Thai Trade Policy:From Non-discriminatory Liberalisation to FTAs”, The World Economy,Vol 30, Issue 10 October 2007,p.1594–1620.2007.
  18. Salintip K.and Jirasak P., “ Factors Affecting Japanese Direct Investment in Automotive, Metal and Electrical Appliances Industries of Thailand”, Journal of Management Science Chiangrai Rajabhat University,Vol.11 No.1 Jan - Jun 2016.
  19. Samart Chiasakul, “Production Networks, Trade and Investment Policies, and Regional Cooperation in Asia: A case study of Automotive Industry in Thailand”,Paper Presented at the sixth ADRF General Meeting.2004.
  20. Sun Haixia and Yang Lingling, “Malaysia auto market:Comparing with Thailand auto market”,Southeast Asian Affairs,Vol 4,p.13-21.2010.
  21. Thaniya O.and Thitiwan S., “Factors Affecting Foreign Direct Investment in Thailand”, Journal of Business, Economics and Communications,Vol 2,p.75-88.2016.
  22. Wad, P., “The automobile industry in Southeast Asia: Malaysia and Thailand”, Journal of the Asia Pacific Economy, Vol. 14, p.172–193.2009.
  23. Wang jiao, “The Empirical Analysis of FDI on Independent Innovation of auto Induestry in China”,Liaoning University.2015.
  24. Woradul Tularak, “Capital Moility in Automotive Sector in Thailand”, Asia:Asia Monitor Resource Centre.2012.
  25. World Trade Organization, “Thailand: Trade Policy Review”, WTO, Geneva.1999.
  26. Zeng shanxiongji. “A Study on the Competitiveness of Japanese Investment in ASEAN Automotive Industry,”Zhejiang University.2015.

Cite this Article:

  • BibTex
  • RIS
  • APA
  • Harvard
  • IEEE
  • MLA
  • Vancouver
  • Chicago

International Journal of Sciences is Open Access Journal.
This article is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) License.
Author(s) retain the copyrights of this article, though, publication rights are with Alkhaer Publications.

Search Articles

Issue May 2019

Volume 8, May 2019


Table of Contents


Order Print Copy

World-wide Delivery is FREE

Share this Issue with Friends:


Submit your Paper