Title: Validating the dynamic relationship between technological innovation and economic growth in Malaysia

Authors: Hussain Ali Bekhet; Nurul Wahilah Abdul Latif

Addresses: Graduate Business School, College of Graduate Studies, Universiti Tenaga Nasional (UNITEN), Kajang 43000 Selangor, Malaysia ' Graduate Business School, College of Graduate Studies, Universiti Tenaga Nasional (UNITEN), Kajang 43000 Selangor, Malaysia

Abstract: Technological innovation is a dynamic growth factor to achieve sustainable development. This study aims to explore the long- and short-run relationship between technological innovation and Malaysia's sustainable growth from 1980 to 2015. Augmented Cobb-Douglas production function is used to scale the technological innovation and economic growth link. The F-bounds test and VECM Granger causality are employed. The dynamic relationships among the gross domestic product, capital, employment, electricity consumption, technological innovation, technological innovation squared and governance institution quality variables; and the nonlinear relationship between technological innovation and economic growth are studied. The study confirms the existence of long-run relationship among the variables and the link between technological innovation and economic growth has an inverted U-shape. Also, technological innovation, technological innovation squared, and governance institution quality Granger-cause economic growth in the long and short run, together with capital, employment and electricity consumption. Therefore, continuous plans and policies are very much needed to drive technological innovation evolution in Malaysia, so the tide is slowly turning.

Keywords: technological innovation; governance institution quality; elasticity; Granger causality; sustainable growth; Malaysia.

DOI: 10.1504/IJTLID.2019.102674

International Journal of Technological Learning, Innovation and Development, 2019 Vol.11 No.3, pp.185 - 214

Received: 05 Feb 2019
Accepted: 05 Mar 2019
Published online: 01 Oct 2019 *

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