Capital Formation in Thailand: Its Importance and Determinants
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 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.
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