Azlina Hanif^1*, Ruhaini Muda², Roland Z. Szabó³ and Arlinah Abd Rashid⁴

^1,4 Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Shah Alam, Malaysia
² Faculty of Business & Management, Universiti Teknologi MARA, Selangor Branch, Puncak Alam, Malaysia
³ Széchenyi István University, Gyor, Hungary

ABSTRACT

This study examined 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 applied Pooled OLS, Fixed Effects, and Random Effects models. The findings showed that digitalization had 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 was 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 pointed 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
Management