The determinants of FDI distribution across manufacturing activities in an Asian industrialising country: a case of Japanese FDI in Thailand

Talerngsri, Pawin (2001) The determinants of FDI distribution across manufacturing activities in an Asian industrialising country: a case of Japanese FDI in Thailand. PhD thesis, University of Nottingham.

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Abstract

This research identifies and investigates the 'industry-level determinants' of FDI in the context of Asian industrialising countries by using the data on Japanese foreign direct investment in Thailand. It differs from previous empirical studies for non-industrialised countries in three important aspects. Firstly, the previous studies (e. g. Lall and Mohammad, 1983) focus on the determinants of FDI in terms of monopolistic characteristics of industries in which foreign firms operate (e.g. technological intensities and scale economies). The present study, on the other hand, examines the influences of locational-specific characteristics of host industries such as factor endowments, trade costs, and policy factors. More distinctively, it examines the effects of vertical (input-output) linkages among Japanese firms. These effects have rarely been investigated in the context of Asian industrialising countries. Thirdly, it constructs the highly disaggregated data on FDI (4-digit ISIC level), using a broad range of information gathered from various published sources. Such data allow the present analysis to examine in detail the 'pattern' and 'determinants' of FDI distribution across segmented stages of manufacturing production rather than broadly defined industrial sectors.

On analysing descriptively the manufacturing distribution of FDI, it was found that Japanese FDI in Thailand was not evenly distributed across manufacturing activities. Some capital- / technology-intensive industries like rail equipment (ISIC 3842) and aircraft (ISIC 3845) did not receive (or host) any FDI during a specified period (1954-1995). On the other hand, other relatively labour-intensive industries like TV, radio, and communication equipment industry (ISIC 3832) and motor vehicle industry (ISIC 3843) received disproportionately large values of FDI. Based on the locational approach to the determinants of FDI in non-industrialised countries, several hypotheses were formulated and quantitatively tested by using cross-sectional data (1985,1990, and 1995). The empirical findings lend strong and consistent support to the postulated hypotheses. It is to be hoped that these empirical findings will not only enhance our understanding of the industry-level determinants of FDI in the context of Asian industrialising countries but also stimulate further work on this line of research.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Milner, C.R.
Reed, G.V.
Keywords: Foreign investments, Thailand, Investments, Japanese, Japan, Foreign economic relations
Subjects: H Social sciences > HG Finance
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
Item ID: 10921
Depositing User: EP, Services
Date Deposited: 04 Oct 2009 12:17
Last Modified: 13 Sep 2016 23:44
URI: http://eprints.nottingham.ac.uk/id/eprint/10921

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