Moderator effect of technological advancement on financial development and economic growth nexus in Asian countries

Technology is a crucial moderator to achieving sustainable development with Financial Development 

Key finding of the study

TA plays a significant moderator role in the FD and EG nexus in both the short run and long run in ASEAN countries.

Authors

Hewage Rishan Sampath, Sabaragamuwa University of Sri Lanka

Jaafer Pyeman, Universiti Teknologi MARA,

Shah Alam Norashida Othman^, Universiti Teknologi MARA, Shah Alam

Summary

The study examined the moderator effect of Technological Advancement (TA) towards Financial Development (FD) and Economic Growth (EG) of ASEAN countries while Human Capital (HC), and Private Consumption (PC) were considered as the Control variables. Data from 35 countries were collected annually over 15 years, spanning from 2005 to 2019. Analysis was done with a short panel where the findings confirm TA’s significant moderator effect in both short and long-run time scenarios. Additionally, a significant negative relationship was observed in FD and PC to EG while TA and HC were recognized as the promoters of EG. The study underscores the importance of investing in TA while concurrently developing the quality of the labor force. Therefore, the findings direct the policymakers to prioritize investments in human capital and innovations. Further, attentiveness to reducing the investments in FD projects and strategies to reduce domestic private consumption is necessary.

Published in

Journal of International Studies

Link to the article  

To read the full article, please click here