| Abstract | This study is concerned with the promoted manufacturing industries in thailand over the 1960-1974 period. They are those industries which are given incentives by the Board of Investment (BoI). Their growth and structure are first analyzed with reference to employment, capitalization and number of projects, and on the basis of industry groups and their associated types as classified by the BoI. The analyses are also made in conjunction with the three promotion policies (the Industrial Investment Acts of 1960, 1962 and 1972) to determine the impact they might have on the promoted industry during thee respective periods (that is, 1960-62, 1962-1972 and 1972-74). It is observed that the BoI-promoted industry has been developed significantly. However, it is found that the minimum investment size (as required by the Acts) of the industry type in each group is unrealistic compared to that of the existing promoted industry. In addition, these Acts have also prohibited the BoI to ignore the proposed projects (submitted before the suspension of promotion of the industry type) which have met such a requirement. Having these factors, the overcapacity problem of several industry types is found to be one of the major shortcomings. This points out the need of the BoI to deal effectively with the appropriate capacity problem. Of all the existing industry types, some of them are found to be relatively important in terms of capitalization, employment and number of projects. Their demand patterns are then analyzed. Each of them is found to follow one of the four demand patterns -- that i, straight line, concave, convex and S-curve. It is observed that the demand pat-tern of an industry type depends on the combination of the promotional policy (import substitution, export promotion and export orientation) and degree of tariff protection (high and low). A matrix is then developed to be used as tool in identifying possible demand patterns. Guideline in forecasting the demand is also presented. Furthermore, as a result of forecasting the demands of the promoted industry types, it is observed that some industry types of which promotion is at present suspended are having the under capacity problem. For each demand pattern, a model is developed for determining the optimal additional capacity of an industry type at a certain point in time. The models are developed on the basis of minimization of the sum of the installation cost of the additional capacity and the penalty cost of shortage, as used in the Manne's capacity expansion model (1967). Unlike Manne's model, the developed models are dynamic in nature. They are applicable even in the case in which the demand pattern changes or shifts in subsequent period. In addition, a project selection model is deve-loped for the situation in which the combined capacity of project candi-dates satisfy the optimal additional capacity and that optimail contribution to the development of the country is obtained. The garment and paint industries are then analysed for illustrating the applications of the models. Comparisons are made between the decisions derived from the models and the actions as taken by the BoI. Finally, con-clusions on the study and the recommendations for further study are drawn. |