How minimum wage and labor skill affected Thailand direct investment abroad (TDI) during 2010-2019?

Abstract

Nowadays Thailand experienced with an upward trend for direct investment abroad (TDI) while there is an upward and downward trend for foreign direct investment (FDI) into Thailand. However, the amount of outward flows for foreign direct investment in Thailand still far behind other developed countries in Asia such as Japan or Singapore. Moreover, Thailand also facing with labor shortage for skilled labor since there is a mismatch between the worker’s skill that company required, and the skills possessed by the workers. Furthermore, with the increasing rate of Thailand’s minimum wage rate makes the country has higher minimum wage when compared to other neighboring countries. Therefore, this study would like to determine whether the minimum wage, skilled labor, and other related factors (internal and external factors) create an impact to Thailand’s outward direct investment abroad or not. Thus, this study applied the quantitative method by using time series data during year 2010-2019 with Ordinary Least Square (OLS) to explain and determine the outward foreign direct investment in Thailand.