The Study Of Determinants Of FDI In Thai Automotive Sector Comparing To Chinese Automotive Sector

This research draws upon the question on what are the determinants of FDI in Thai automotive sector comparing to Chinese automotive sector.As China is now the biggest manufacturer in the world,overtook the United States in 2008,the researcher believe that to do the research on China would be helpful to her own country which is Thailand.But readers may wonder why automotive sector.It is because automotive sector is one of the major economic drivers in the country.The industry is accounted as 12 percentages to the whole GDP,and it had made the country to be part of the Global Value Chain(GVC).Moreover,Thailand is now an automotive production hub in Asia.Therefore this industry is picked to examine and analyze to see the investor's perspective toward the country.To investigate,the methodology used in this paper is based on qualitative approach with secondary data collected from online sources.After finalizing the data,findings show that there are four main determinants of FDI in Thai automotive industry.These include criteria on cost and quality of labors,government's supportive policies and tax incentives,demand and growth of host market,and,lastly,strong growth of auto parts sector.To see the competitive advantage over other countries in South East Asia and results more clearly and precisely,the researcher also compared the data with some country namely Malaysia,Indonesia,Philippine,and Vietnam.By holding advantages over these factors,it influences leading car producers to invest in Thailand and to chose the country as an export hub serving both domestic and international markets.For the finding in China,the country is the biggest internal market in the world with 1.3 billion potential customers.It is also a rapidly growing market(usually at least 7% growth per year).Even though the situation is changing in certain areas,labor costs remain comparatively low.In addition,the researcher has found that the Chinese government has issued several regulations that help protect the domestic firms namely joint venture policy for FDI,higher Tariff for entering the market,etc.However,the further research should be done to see the negative of these policies toward the host country.