On the Rationale of Thai Entrepreneur’s Investment Decision in the Border Provinces of Thailand and in ASEAN Countries
Keywords:
Investment, location, Multinational EnterpriseAbstract
Based on an Eclectic Paradigm or OLI Framework, this study analyzes the rationale behind investment in Thai border provinces and fellow ASEAN countries undertaken by Thai entrepreneurs. In-depth interviews and surveys comprise the main methodology employed in this study. It is surprising to find that entrepreneurs who expand their businesses into border areas do not have significant “ownership advantage.” They tend to represent “Original Equipment Manufacturers”, that is operations producing unskilled-labor-intensive goods, using no advanced technology and facing relatively low market shares. The main reason behind such firms expanding their businesses to border provinces lies in either a “Market Seeking” strategy or “Horizontal” investment. The characteristics and investment rationale are totally different from entrepreneurs investing in ASEAN countries. This group tends to comprise “Original Brand Manufacturers”, or OBMs, which seek new markets in ASEAN countries not only for market expansion reasons, but also for the purpose of seeking opportunities to assimilate new technology.
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