ECONOMIC OF INCREASING THE ABILITY TO ATTRACT FOREIGN DIRECT INVESTMENT

Abstract

This academic article aims to present: 1. an analysis of Thailand’s macroeconomic landscape and the status of foreign direct investment (FDI); 2.  an assessment of structural constraints affecting the country’s competitiveness in attracting FDI; and 3. a synthesis of policy approaches to enhance economic competitiveness. The study is significant in the context of Thailand’s economy undergoing a critical transition of recovery and structural transformation, amid intensifying investment competition within the ASEAN region. It is found that Thailand continues to face key limitations in regulatory frameworks, labor quality, and trade agreements, resulting in lower FDI inflows compared to its regional counterparts. The analytical approach employs a synthesis of policy-related data, macroeconomic indicators, and investment economics frameworks, particularly the OLI (Eclectic Paradigm) theory, to explain the determinants of foreign investors’ decision-making, alongside comparative analysis with other countries in the region. The findings indicate that enhancing the country’s capacity to attract FDI requires an integrated approach, including the clear identification of target industries, the development of workforce skills aligned with global market demands, regulatory reforms to improve flexibility, and the design of coherent and more attractive investment incentives. The study concludes that strengthening the potential to attract foreign direct investment cannot rely solely on conventional economic measures; rather, it requires a proactive role of the state in governing the investment ecosystem, fostering inter-agency policy integration, and implementing effective strategic management in order to achieve sustainable long-term competitiveness.