Browse > Article
http://dx.doi.org/10.5392/JKCA.2020.20.01.304

The Influences of Thailand's Import and FDI on Lao PDR's Economic Growth  

Kim, Kyu (경남과학기술대학교 경제학과)
Kwon, KiChul (부산외국어대학교 경제금융학과)
Publication Information
The Journal of the Korea Contents Association / v.20, no.1, 2020 , pp. 304-316 More about this Journal
Abstract
Laos is rich in natural resources but lacks the capital to develop them. Partly alleviating the shortage is FDI from neighboring countries, especially Thailand. Not only does this contribute to directly increasing GDP by increasing effective demand, it also has an additional GDP increase effect by expanding Laos' production capacity. Laos' exports mostly consist of mineral resources and electricity. This, too, contributes to an increase in GDP by increasing the effective demand. Thailand accounts for more than 40 percent of Laos' exports. This paper tries to confirm the economic impact on Laos in Thailand through a econometric analysis of Laos' GDP, Laos' exports to Thailand and Thailand's FDI to Laos. It turns out that economic ties with Thailand, including exports to Thailand and Thailand's FDI, play a very important role in Laos' economic growth. Laos recently recorded relatively robust economic growth, but its driving force is weak. That's because Laos' growth engines are very limited and have no resilience to external shocks. Moreover, economic growth has not been linked to an increase in employment because the economy is not diversified and growth in the hydroelectric power sector does not lead to growth in other sectors. Given this, Laos needs to actively take advantage of its geographical proximity to Thailand. It is necessary to create a more active environment for the inflow of FDI in Thailand, to foster resource-based and labor-based manufacturing to take advantage of the Thai market.
Keywords
Laos; Thailand; GDP; Export; FDI; Granger Causality Analysis;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
연도 인용수 순위
1 B. Sisouphangthong and C. Taillard, Atlas of Laos: The Spatial Structures of Economic and Social Development of the Lao People's Democratic Republic, Copenhagen: NIAS Press, 2000.
2 이요한, "라오스 2017: 정치적 정체와 경제적 변화의 혼재," 동남아시아연구, 제28권, 제1호, pp.145-171, 2018.   DOI
3 OECD, OECD Investment Policy Reviews: Lao PDR, https://read.oecd-ilibrary.org/finance-and -investment/oecd-investment-policy-reviews-l ao-pdr-2017_9789264276055-en#page1, 2017. (2018.12.13 접속)
4 M. Lord, "Lao PDR Resource-led Export Growth," MPRA Paper No.61062, 2011.
5 US Department of State, Investment Climate Assessment: Lao PDR. Washington, 2015.
6 ASEAN, ASEAN Investment Report 2013-2014: FDI Development and Regional Value Chains, Jakarta, 2014.
7 T. Farole and D. Winkler, Making Foreign Ddirect Investment Work for Sub-Saharan Africa: Local Spillovers and Competitiveness in Gglobal Value Chains, World Bank: Washington, 2014.
8 S. Chirathivat and K. Cheewatrakoolpong, "Thailand's Economic Integration with Neighboring Countries and Possible Connectivity with South Asia," ADBI Working Paper Series, 2015.
9 L. A. Rivera-Batiz and P. M. Romer, "Economic Integration and Endogenous Growth," Quarterly Journal of Economics, Vol.106, No.2, pp.531-555, 1991.   DOI
10 G. Grossman and E. Helpman, Innovation and Growth in the Global Economy, Cambridge, MA: MIT Press, 1991.
11 R. Barro and X. Sala-i-Martin, "Technological Diffusion, Convergence, and Growth," Journal of Economic Growth, Vol.2. No.1, pp.1-26, 1997.   DOI
12 S. Edwards, "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Vol.108, No.447, pp.383-98, 1998.   DOI
13 A. Harrison, "Openness and Growth: A Time Series, Cross Countries Analysis for Developing Countries," World Bank Policy Research Papers, No.809, Washington D.C, 1991.
14 UN Comtrade Database, https://comtrade.un.org/ (2018.10.1. 접속)
15 H. A. Mobeen, "An Econometric Analysis of Export-Led Growth Hypothesis: Reflections from Pakistan," Interdisciplinary Journal of Contemporary Research in Business, Vol.2, No.12, pp.329-338, 2011.
16 D. Dolla and A. Kraay, Growth is Good for the Poor, World Bank Research Working Paper, 2001.
17 E. Borensztein, J. De Gregorio, and J. W. Lee, "How Does Foreign Direct Investment Affect Economic Growth?," Journal of International Economics, Vol.45, No.1, pp.115-135, 1998.   DOI
18 A. K. Fosu, "Export Composition and the Impact of Exports on Economic Growth of Development Economies," Economic Letters. Vol.34, No.1, pp.67-71, 1990.   DOI
19 J. Sachs and A. Warner, "Sources of Slow Growth in African Economies," Journal of African Economies, Vol.6, No.3, pp.335-376, 1997.   DOI
20 V. N. Balasubramanyam, M. A. Salisu, and D. Sapsford, "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Vol.106, pp.92-105, 1996.   DOI
21 R. B. Tekin, "Development Aid, Openness to Trade and Economic Growth in Least Developed Countries: Bootstrap Panel Granger Causality Analysis," Social and Behavioral Sciences, Vol.62, pp.716-721, 2012.
22 M. Carkovic and R. Levine, Does Foreign Direct Investment Accelerate Economic Growth?, University of Minnesota, Working Paper, 2002.
23 김규, 권기철, "라오스의 경제성장에서 대외부문의 역할: 무역, FDI, 원조, 관광, 송금을 중심으로," 아태연구, 제24권, 제1호, pp.131-159, 2017.   DOI
24 C. R. Nelson and C. I. Plosser, "Trends and Random Walks in Macroeconomic Time Series : Some Evidence and Implications," Journal of Monetary Economics, Vol.10, No.2, pp.139-162, 1982.   DOI
25 R. F. Engle and C. W. J. Granger, "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Vol.55, No.2, pp.251-276, 1987.   DOI
26 S. Johansen, "Statistical Analysis of Cointegration Vectors," Journal of Economic Dynamics and Control, Vol.12, No.2-3, pp.231-254, 1988.   DOI
27 National Statistical Center, Statistical Yearbook 2007, Vientiane Capital: Ministry of Planning and Investment of Lao PDR, 2007.
28 EU, "Economic and Trade Rreport - Lao PDR: August 2017," Ref.Ares 4007078 - 11/08/2017, 2017.
29 V. Pholsena and R. Banomyong, Laos: From Buffer State to Crossroad?, Bangkok: Mekong Press, 2006.