The Effect of Technological Progress on Economic Growth in Thailand According to New Growth Theory
The Effect of Technological Progress on Economic Growth in Thailand According to New Growth Theory

Summary/Abstract: This paper aims to analyze the effect of research and development expenditure and foreign direct investment (domestic and international technological transfer, respectively), on economic growth in Thailand by measuring the total factor productivity (TFP) from 1986–2016. The findings indicate that research and development expenditure and foreign direct investment, have a long-run relationship with economic growth measured by TFP. At the same time, when independent variables experience shock, TFP deviates from the equilibrium path. The results of the error correction model (ECM) show that TFP returns to equilibrium in the next five periods approximately. Moreover, growth rate is applied to measure the effect of the relationship between research and development expenditure and foreign direct investment on economic growth. The least squares estimator (LSE) is used to identify the relationship since the growth is stationary at level. The results show the different effects of research and development expenditure and foreign direct investment on the TFP of Thailand.

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