The Factors Influencing Foreign Direct Investment for Information and Communication Technology Industries (ICT) in Thailand 4.0 era

Abstract

          This research aims to study about the factors consisting of policy rate, manufacturing production index, dividend yield of ICT stock, consumer price index, average labor cost of ICT industry, total foreign direct investment and exchange rate, which have an impact on the Foreign Direct Investment for Information and Communication Technology Industries (ICT) in Thailand 4.0 era. The methodology includes (1) Stationarity Test (2) Cointegration Test (3) Error Correction Model estimation (4) Granger Causality Test.

          The results indicate that the stationarity of variables are the mixes of both I(0) and I(1). Therefore, the Autoregressive Distributed Lag (ARDL) model is appropriate for testing the long-run Cointegration and short-run adjustment. The results indicate that the manufacturing product index and the labor cost of ICT had a positive impact on foreign direct investment of ICT, while the policy rate had a negative impact on foreign direct investment. The short-run adjustment (ECM) shows that, the foreign direct investment of ICT reverts to its long-run equilibrium in each subsequent period at the rate of 79.86% of the deviation due to external shock.