Factors influencing the foreign direct investmet inflow in tourism industry in Thailand

Abstract

Tourism industry has been considered as an important part of the Thai economy since tourism helps support many tourism businesses, increase employment, and compensate for other industries presenting weak growth, which will generate high income for Thailand continuously. This paper employs multiple regression by using Ordinary Least Squares (OLS) method to investigate factors influencing Foreign Direct Investment (FDI) inflows in tourism industry in Thailand over the period 2000 - 2019, especially the effect of tourism- induced factors on FDI inflows including growth of tourism industry, tourism average spending, and tourism demand volume. Quarterly data using in this paper is based on secondary sources and prior studies in order to identify the issue and analyze their importance. The obtained results indicate that interest rate, growth of tourism industry, tourism revenues, and number of international tourist arrivals significantly impact on FDI inflow in the industry. The paper also mentions about expansion of policies and measurements, and development of sustainable tourism in the future in order to attract FDI to the industry.