INFRASTRUCTURE AS A LIFELINE FOR FOREIGN DIRECT INVESTMENT IN THAILAND: ROLE OF QUALITY OF RAILROAD, AIR TRANSPORT AND ROAD INFRASTRUCTURE

Abstract

In recent years, the Thailand economy has become more open to foreign trade as well as foreign direct investment (FDI). Policy reforms claim that countries with good transport infrastructure attract more FDI. Thus the following study was designed with the aim to analyze the impact of quality of railroad, air transport and road infrastructure on foreign direct investment. For this purpose time series data was collected from Thailand on these variables and subjected to the vector autoregressive representation (VAR) model for analysis. The data was made stationary and integrated prior to modelling. The outputs revealed that the quality of three independent variables related to transport infrastructure were positively correlated to FDI in Thailand. This study may provide assistance to the government and policy makers in devising policies that favor the maintenance of quality of railroads, air transport and roads so that these aspects may increase the amount of FDI in the country in the long run.