Analysis of trade and technology absorption in Thailand by using BVAR and MSBVAR Model

Abstract

The purpose of this research is to find out the relationship between each variable of trade and technology absorption and aims to compare and forecast technology absorption in Thailand by using BVAR and MSBVAR model for the period of 1995 -2019. To achieved paper goals, we assumed variables are both dependent and independent variables including gross domestic product per capita (GDP), degree of trade openness (DOT), human development index (HDI), gross capital formation (CF). For technology absorption, we used three poxies to reflect technology absorption namely manufacturing value added (MVA), the value of high technology exports (TECHEX) and the value of charge for the use of intellectual property payment in the balance of payments (BOP). Consequently, the model is based on the VAR approach because each variable has an equation explain its evolution based on its own lags of the other model variable. Data have been collected from World Bank and annual reported by government organization. For analysis our data, BVAR and MSBVAR are used in this studied. R and Eviews program are used to estimate and display the result of this study. Our analysis shows that MSBVAR.lag3 is the most suitable to find out the relationship between each variables and used to forecast the impact of technology absorption in Thailand.