Socio-economic impacts of foreign direct investment for long-term success : the case of Chinese electric vehicle (EV) manufacturers in Thailand
Abstract
This thesis investigates the socio-economic impacts of Chinese Electric Vehicle (EV) Foreign Direct Investment (FDI) within Thailand’s automotive ecosystem. Positioned at the intersection of international business and international development, the study addresses a critical strategic paradox: how efficiency-seeking multinational firms reconcile purely commercial cost-competitiveness configurations with legitimacy-seeking actions to secure a "Social License to Operate" (SLO) from host-country actors. Based on a theoretical framework constructed combing Ownership-Location-Internalization (OLI) Framework, the Institutional Theory and the Global Value Chain (GVC) Framework, this study examines the dualities of Chinese firms’ investment strategies and operational mechanisms driven by Thailand’s industrial policies and domestic realities. A qualitative methodology was employed, utilizing secondary desk research on empirical actions alongside primary data gathered via semi-structured, in-depth interviews with factory workers, corporate management, vocational trainers, and domestic suppliers. The findings reveal a distinct temporal pattern in the socio-economic impacts of Chinese EV investment in Thailand. In the short term, the rapid expansion of Chinese EV manufacturers intensifies market competition, compresses industry profit margins, and generates labor market adjustment pressures arising from skills mismatches. Traditional supplier networks also face structural challenges from the vertical integration practices of Chinese firms. In the long term, however, the global growth ambitions of Chinese firms drive greater localization, adaptability, and stakeholder engagement. Through partnership with vocational training and higher-education institutions, as well as collaboration with established Thai suppliers, Chinese EV investment cultivates human capital enhancement, technological upgrading, and deeper industrial integration. These processes are expected to accelerate Thailand’s green industrial transformation, enhance income-generating opportunities, and strengthen long-term economic resilience.