The impact of technological innovation and governance institution quality on Malaysia's sustainable growth: Evidence from a dynamic relationship

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Abstract

Technological innovation integrated with strategic policies is vital for sustainable growth. This study aims to highlight the importance of technological innovation and governance institution quality on Malaysia's sustainable growth from 1985 through 2015. The dynamic relationships among gross domestic product, capital, employment, electricity consumption, technological innovation, governance institution quality, and the interaction of technological innovation and governance institution quality are examined. The augmented production function, F-bound, dynamic ordinary least squares, and Granger causality tests are utilized. The results confirm the dynamic relationship among the above variables. In the long run, unidirectional causality runs from governance institution quality and technological innovation-governance institution quality toward Malaysia's financial development. However, in the short run, there is bidirectional causality between financial development and economic growth. The interaction between technological innovation and governance institution quality has a significant positive impact on Malaysia's economy in the long run. Also, capital, employment, and electricity consumption have a positive significant impact on economic growth in the long run. These three variables are vital growth inputs and should be accompanied by technological innovation and governance institution quality. Well-planned and relevant policies can boost technological progress in Malaysia, slowly yet surely.

Original languageEnglish
Pages (from-to)27-40
Number of pages14
JournalTechnology in Society
Volume54
DOIs
Publication statusPublished - 01 Aug 2018

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technical innovation
Malaysia
Innovation
governance
evidence
causality
electricity consumption
economic growth
Electricity
Economics
technological progress
production function
gross domestic product
interaction
Technological innovation
Governance
Sustainable growth
economy

All Science Journal Classification (ASJC) codes

  • Human Factors and Ergonomics
  • Business and International Management
  • Education
  • Sociology and Political Science

Cite this

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title = "The impact of technological innovation and governance institution quality on Malaysia's sustainable growth: Evidence from a dynamic relationship",
abstract = "Technological innovation integrated with strategic policies is vital for sustainable growth. This study aims to highlight the importance of technological innovation and governance institution quality on Malaysia's sustainable growth from 1985 through 2015. The dynamic relationships among gross domestic product, capital, employment, electricity consumption, technological innovation, governance institution quality, and the interaction of technological innovation and governance institution quality are examined. The augmented production function, F-bound, dynamic ordinary least squares, and Granger causality tests are utilized. The results confirm the dynamic relationship among the above variables. In the long run, unidirectional causality runs from governance institution quality and technological innovation-governance institution quality toward Malaysia's financial development. However, in the short run, there is bidirectional causality between financial development and economic growth. The interaction between technological innovation and governance institution quality has a significant positive impact on Malaysia's economy in the long run. Also, capital, employment, and electricity consumption have a positive significant impact on economic growth in the long run. These three variables are vital growth inputs and should be accompanied by technological innovation and governance institution quality. Well-planned and relevant policies can boost technological progress in Malaysia, slowly yet surely.",
author = "{A. Bekhet}, Hussain and {Abdul Latif}, {Nurul Wahilah}",
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N2 - Technological innovation integrated with strategic policies is vital for sustainable growth. This study aims to highlight the importance of technological innovation and governance institution quality on Malaysia's sustainable growth from 1985 through 2015. The dynamic relationships among gross domestic product, capital, employment, electricity consumption, technological innovation, governance institution quality, and the interaction of technological innovation and governance institution quality are examined. The augmented production function, F-bound, dynamic ordinary least squares, and Granger causality tests are utilized. The results confirm the dynamic relationship among the above variables. In the long run, unidirectional causality runs from governance institution quality and technological innovation-governance institution quality toward Malaysia's financial development. However, in the short run, there is bidirectional causality between financial development and economic growth. The interaction between technological innovation and governance institution quality has a significant positive impact on Malaysia's economy in the long run. Also, capital, employment, and electricity consumption have a positive significant impact on economic growth in the long run. These three variables are vital growth inputs and should be accompanied by technological innovation and governance institution quality. Well-planned and relevant policies can boost technological progress in Malaysia, slowly yet surely.

AB - Technological innovation integrated with strategic policies is vital for sustainable growth. This study aims to highlight the importance of technological innovation and governance institution quality on Malaysia's sustainable growth from 1985 through 2015. The dynamic relationships among gross domestic product, capital, employment, electricity consumption, technological innovation, governance institution quality, and the interaction of technological innovation and governance institution quality are examined. The augmented production function, F-bound, dynamic ordinary least squares, and Granger causality tests are utilized. The results confirm the dynamic relationship among the above variables. In the long run, unidirectional causality runs from governance institution quality and technological innovation-governance institution quality toward Malaysia's financial development. However, in the short run, there is bidirectional causality between financial development and economic growth. The interaction between technological innovation and governance institution quality has a significant positive impact on Malaysia's economy in the long run. Also, capital, employment, and electricity consumption have a positive significant impact on economic growth in the long run. These three variables are vital growth inputs and should be accompanied by technological innovation and governance institution quality. Well-planned and relevant policies can boost technological progress in Malaysia, slowly yet surely.

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