THE DETERMINANTS OF THAILAND’S OUTWARD FOREIGN DIRECT INVESTMENT: THE CAUSAL COMPLEXITY STUDY

The studies of foreign direct investments (FDI) are prolific, primarily with regard to the outflow of capital from developed countries or large emerging economies that invest in developing or underdeveloped countries. Furthermore, a significant amount of this research has focused on a few dominant countries, such as China, the USA, and India. Predictive variables of FDI are purported to be average hourly wage, size of the labor force, number of patents, and geographic distance between countries. However, this chapter provides a review of the FDI literature, highlighting gaps in our understanding of the outflow of FDI from developing countries. We utilize Thailand and China as two countries that provide opportunities for a unique comparative case study in future research, proposing explanations for how countries like Thailand do not behave as FDI theories would predict. We then pose alternative explanations for why Thailand, with limited resources and a low tolerance for risk, might deviate from FDI theories and predictions.