Revisiting the Impact of Foreign Direct Investment on the Economic Growth in Thailand

Chong, Yi Syen (2021) Revisiting the Impact of Foreign Direct Investment on the Economic Growth in Thailand. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

This study identifies the impact of foreign direct investment (FDI) on the economic growth in Thailand. This paper also examines the short run and long run relationship, along with the causal relationship between the real Gross Domestic Product in Thailand, with the independent variables including FDI, real effective exchange rate (REER) and trade by employing yearly data over the period 1980 to 2019. Towards these purposes, this paper employed unit root test, error correction model (ECM) techniques, Granger Causality test and other diagnostic tests. The results show that all the variables are significant to affect economic growth in Thailand, and the long-run estimation suggests that foreign direct investment is positive and indeed statistically significant in impacting Thailand’s economy.