An Analysis of Determinants Influencing Thailand’s Outward Foreign Direct Investment in BRICS Countries
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Abstract
This study aims to analyze the factors influencing Thailand’s outward foreign direct investment (OFDI) in BRICS countries by examining both pull and push factors. A quantitative research approach was employed using Panel Regression for pull factors and a Vector Autoregressive (VAR) model for push factors, based on data from 2005 to 2022 obtained from secondary sources, including the World Bank, the Bank of Thailand, and the World Development Indicators (WDI). The findings indicate that among the pull factors, the Rule of Law Index (RL) and Gross Domestic Product (GDP) in host countries have positive and statistically significant influences on Thailand’s OFDI, suggesting that legal stability and market size are primary determinants for investment decisions. Trade openness (OPEN) showed a positive but not statistically significant effect. For the push factors, none of the domestic variables were statistically significant, but lagged OFDI values in the VAR model consistently demonstrated positive and significant impacts, highlighting strong path dependency in Thailand’s outward investment. These results suggest that Thai firms prioritize host-country institutional quality and economic conditions, while domestic economic and political factors play a lesser role in shaping OFDI flows in the short term.
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