The interaction effect between technological innovation and institutional quality on economic growth in ASEAN countries

Abstract

This study aims to assess the interaction effect between technological innovation and institutional quality to examine their adaptability and effect on economic growth in ASEAN countries during the period 2007-2022. The data sourced from the World Bank (WB), WDI, and WGI. Using the feasible generalized least squares (FGLS) estimation method with panel data, the results show that capital accumulation growth, the interaction between technological innovation and institutional quality, foreign direct investment, trade openness and urbanization have a positive impact on growth. In contrast, human capital, institutional quality, and technological innovation negatively affect economic growth in ASEAN countries. Based on the findings, the article suggests that in order to promote economic growth, ASEAN countries should build and implement quality institutions, enhancing the adaptability between technological innovation and institutional quality to advance innovation and technological progress, thereby generating new drivers for economic growth in the region.