Cultural distance and foreign direct investment stock in Thailand

Evidence from panel data

Bibliographic Data

ID13022288
AuthorsSiwapong Dheera aumpon (0000-0002-1840-6485, Kasetsart University, corresponding author), Siwapong Dheera-aumpon, Piyaphan Changwatchai (Kasetsart University)
Year2020
Volume13
Issue4
Pages81-96
Publication date2020-12-01
Open AccessYes
TypeARTICLE
VenueEconomics & Sociology (JOURNAL)
Journal identifiersISSN: 2071-789X • E-ISSN: 2306-3459
PublisherCentre of Sociological Research, NGO (PUBLISHER)
DOI10.14254/2071-789x.2020/13-4/5
OpenAlexW3123581592
LanguageEN
Citations received1
References cited6

Cultural distance can be defined as differences in cultural values and communication styles between the source and the host countries that can have negative impacts on stocks of FDI in the latter. Prior studies focused on the perspective of a source country and pooled data from various host countries but here we focus on the perspective of a host country and use data from a single host country, Thailand. To study the effect of cultural distance, data on 2006-2019 FDI stocks held in Thailand by foreign entities from 32 major source countries are collected. Results of a random effects regression model indicate that cultural distance between Thailand and a source country does not reduce but raises the stock of FDI. We conclude that culture in Thailand does not hinder the operations of foreign companies but instead enhances investment opportunities. In promoting FDI in Thailand, the government should aim at culturally distant source countries. In doing so, the government should emphasize that Thai culture is collective, feminine, and has high uncertainty avoidance

Business · Econometrics · Economics · Foreign direct investment · Geography · Macroeconomics · Panel data · Stock (firearms · Corporate Finance and Governance · International Business and FDI · Islamic Finance and Banking Studies

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