There are cases in which outward FDI has not contributed
to increasing competitiveness, including Thai President Foods’
troubled operations in China (Pavida, 2004). While corporate
strategy on internationalization that was not well thought through
contributed to the subsequent failure of some Thai outward FDI
activities in the period 1997-2002, the financial crisis and
excessive exposure to currency risks also undermined their
overseas ventures and competitiveness. There is a need to
differentiate financing decision from real investment decision
when evaluating the cases that unfolded during the crisis period.
If the failures of outward FDI activities were due to an
inappropriate financing decision, then it does not necessarily
follow that outward FDI did not lead to increasing
competitiveness of Thai firms. The sales of assets abroad might
have been due to an excessive debt obligation in the light of a
significant depreciation of the home currency and a pressing
need to relieve the precarious financial situation. In other words,
cases that were largely influenced by the financial crisis have
to be sieved out in assessing the impact of outward FDI on Thai
enterprise competitiveness as they were not operating in normal
circumstances.