The Impact of Net Food Exports on the Growth of Foreign Direct Investment (FDI) in Thailand

Abstract

This study aims to examine the impact of net food exports on the growth of foreign direct investment (FDI) in Thailand by developing a comparative model between FDI in the food sector and total FDI. The research employed secondary annual time-series data spanning 21 years (2002–2023), collected from UNCTAD, the Bank of Thailand, the World Bank, and the Ministry of Labor. Stepwise multiple linear regression was applied to identify key influencing factors. The findings reveal that gross domestic product (GDP) is the only variable that significantly affects FDI in the food sector, whereas total FDI is significantly influenced by four variables: net food exports (NFE), GDP, minimum wage, and research and development (R&D) expenditure. GDP and minimum wage have a positive relationship with total FDI, while NFE and R&D expenditure show a negative relationship. Exchange rate and inflation rate do not exhibit statistically significant effects on either form of FDI. These results suggest that economic growth and labor cost structure are key drivers of FDI at the national level, while exports and innovation still lack strong linkages to foreign investment. Thus, investment promotion policies should focus more on strengthening the food sector and innovation capacity to enhance Thailand’s ability to attract high-quality FDI and sustain long-term economic competitiveness.