Exploring the Relationship Among Foreign Direct Investment, Technology Transfer and Economic Growth: A Case of the Lower Northern Region in Thailand

Abstract

Purpose: This article aimed to examine factors determining Foreign Direct Investment (FDI) leading to technology transfer on economic growth in Thailand and to study policies related to foreign investment promotion. Theoretical framework: The target variables were formed to set up a model specification to estimate the relationship between determinants in terms of technology transfer, FDI, and economic growth of Thailand. Design/Methodology/Approach: The research scope covered and explored the relevant dataset of each expected variable from 1995 – 2021 and some target companies enquired in 2021. The secondary data included FDI at regional level, Gross provincial products (GPP), the number of establishment enterprises in the province and others. Findings: The major factors determined FDI included the number of labour, the number of establishments, consumer price index, the value of investment and the number of internet users. These determinants had significant relationship with the GPP. Most entrepreneurs confirmed that technology transfer affected the investment decision. Research, practical & social implications: The researchers indicated that there was significant relationship among the GPP and other independent variables ;for instance, the number of labour, the number of establishments, the FDI, and the number of internet users. The government plans reflected the investment mechanism and extensively stimulated the region’s development. Originality/Value: The value of this research confirmed that technology adopted increased productivity in the production processes. The government created the investment promotion through the infrastructure and facilities which would support the area-based regional development.