Investment of Tesco in the Retail Market in Thailand

The Thai retail environment has distorted radically in the years since the 1997 financial crisis, which saw lots of Thai shareholders having to sell their shares to foreign-owned multinational retail operators, as well as the Thai government’s policy to hold trade liberalization in its wish to contribute in the World Trade Organisation (WTO) and AFTA (ASEAN Free Trade Area) (David W. Raisbeck, 2003). To struggle with the financial crisis, the Thai government followed trade deregulation. Thailand has since welcomed an influx of large-scale multinational hypermarket, supermarket and specialist retailers, which are eager for a share of the Thai retail market. This has raised protests from several Thai academics and traditional retailers, which have raised the "nationalist" alarm bells.
Numerous Thai-owned minute and medium-sized retailers have been pushed out of business since they could not fight with the much better multinational discount stores, as some better Thai retailers have been bought out by foreign conglomerates. The majority of these foreign investors possess relative advantages in terms of a noise financial base, superior economies of scale, lower costs of production and superior bargaining power, due to their much larger order volumes (E.G., 2005).
Foreign Direct Investment (FDI)
"In this increasingly open world, FDI has become an important driving force for economic globalization". (Xinhua News Agency, 2002)
It can be supposed that FDI is fine and essential for the development of Thailand. FDI is regarded as a source of power in the globalization process that sets apart the modern world economy. The process has reduced the value of territorial boundaries and every area of the world is in a single way or another engaged in the process (FAOSTAT, 2005). The region should thus raise its international share of FDI. The supposition is based on the possibly incontrovertible roles that FDI can play in the growth of the region. This justifies the anxiety about the call for an ability of the region to increase its international share of FDI inflows.
FDI in Thailand
Foreign direct investment has been a significant constituent of Thailand’s economic development process. Given the rising meaning of industrial competitiveness in a gradually more spirited global marketplace and the possibility of the association linking FDI and technological improvement, this research discovers two questions opposite Thai policymakers: (i) what are the most effectual ways in which technology relocate can take place during FDI. and (ii) how can such transfers be accelerated and improved during FDI promotion policies

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