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This thesis examines the dynamics of industrial development in the areas where Thailand borders with neighbouring countries. It argues that the locational advantages approach 'one that focuses on social and economic connections in border towns, government investments, policy measures and the role of export-oriented multinational companies' is not necessarily an appropriate approach. An investigation is conducted to find out to what extent the locational advantages approach applies to Thai border towns. An assessment of the government role in promoting and managing industrial development has also been undertaken to identify the success of this industrial decentralisation scheme. Other factors that contribute to industrial development are also examined. The thesis uses a comparative case study approach, comparing sponsored and non-sponsored towns, and presents four case studies of border towns in Thailand, bordering Myanmar and Laos. This research method provides a better assessment than an internal assessment of government programmes would. The results show that the dynamics of industrial development in Thai border towns is better explained by the production network approach emphasising the embeddedness of small and medium sized local manufacturing industries. The entrepreneurship and social networks of entrepreneurs promote the emergence and growth of industrial development. Horizontal industrial relationships promote flexible operations and compensate for limited access and resources in border towns. In addition, a border location does not by itself stimulate economic link with the neighbouring country because negative perception and regulatory barriers to the crossing of borders hinder mutual cooperation. Due to the discrepancy between government assumptions programmes and the dynamics of industrial development, the survey shows that the impacts of government investments on industrial development are marginal. The thesis concludes that the applicability of the locational advantages approach for industrial development in Thai border towns is limited and that the policy of the government and international agencies should be diverse and should consider other approaches such as a production network approach. Similarly, government programmes should accommodate the needs of small and medium sized manufacturing industries. The role of local government and the private sectors in minimising barriers to the crossing of borders should also be considered.