Capital Formation in Thailand: Its Importance and Determinants

11 Pages Posted: 5 Oct 2014 Last revised: 26 Nov 2014

See all articles by Komain Jiranyakul

Komain Jiranyakul

National Institute of Development Administration

Date Written: October 5, 2014

Abstract

Using the dataset that comprises annual data during 1979 and 2012 and obtained from various sources, this study examines the importance of capital formation to Thai economy and what driving forces influence capital formation. The results show that real GDP and capital formation are cointegrated, and capital formation imposes a positive impact on real GDP in the long run. It is also found that stock market liquidity measured by stock market capitalization rather than foreign direct investment plays important role in capital accumulation process. These findings give some policy implications.

Keywords: Capital formation, economic growth, stock market capitalization, bounds testing

JEL Classification: E22, O40

Suggested Citation

Jiranyakul, Komain, Capital Formation in Thailand: Its Importance and Determinants (October 5, 2014). Available at SSRN: https://ssrn.com/abstract=2505562 or http://dx.doi.org/10.2139/ssrn.2505562

Komain Jiranyakul (Contact Author)

National Institute of Development Administration ( email )

118 Seri Thai Road
Bangkok, 10240
Thailand

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