There are various factors that may lead to performance differences between foreign and domestic firms. First, foreign-controlled firms possess firm-specific advantages and superior technology know-how Boardman et al., 1997; Majumdar,1997 . Second, as far as Thailand is concerned, foreign firms obtain various investment promotion benefits from the Thai government. Third, their controlling are not located in Thailand making monitoring more difficult. Finally, most of the
firms that have foreign corporations as their controlling shareholders are run by professionals who own no stakes in the firms. Due to the first and second factors,foreign-controlled firms are likely to display superior performance relative to domestic firms. The latter factors, however, are likely to affect the firms’ governance and corporate performance negatively.