Azlina Hanif^1*, Ruhaini Muda², Arlinah Abd Rashid⁴ and Roland Szabo⁴

¹Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Selangor, Malaysia
²Faculty of Business and Management, Universiti Teknologi MARA, Selangor, Malaysia
³ Széchenyi István University of Győr, Győr, Egyetem tér 1, Hungary
⁴Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Selangor, Malaysia

ABSTRACT

This study examines the relationship between digitalization and economic growth in ASEAN economies, with a particular focus on the role of institutional quality from a governance and management perspective. Using panel data from eight ASEAN countries over the period 2000–2023, the study applies Pooled OLS, Fixed Effects, and Random Effects models. The findings show that digitalization has a statistically significant negative effect on economic growth, which may reflect inefficiencies, capability gaps, and challenges in integrating digital technologies effectively. The interaction between digitalization and institutional quality is not statistically significant, suggesting that existing institutional frameworks may not yet be effective in supporting decision-making and performance outcomes in digital environments. These findings point to a mismatch between rapid digital adoption and institutional readiness. The study contributes by highlighting the importance of governance and institutional support in shaping how digitalization translates into economic and organisational outcomes.

Keywords: Digitalization, Economic Growth, Institutional Quality, Governance, ASEAN