Jurnal Ekonomi Malaysia

The Effect of Institutional Quality on Economic Growth: Evidence from 14 Asia-Pacific Economies
Kesan Kualiti Institusi terhadap Pertumbuhan Ekonomi: Bukti daripada 14 Ekonomi Asia-Pasifik

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM, Bangi Selangor, MALAYSIA

home5618721@126.com

Faculty of Economics and Management
Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM, Bangi Selangor, MALAYSIA

laiws@ukm.edu.my

Abstract

This paper examines the impact of institutional quality on the economic growth of 14 Asia-Pacific economies using the Theory of Institutional Embeddedness. A multilayer statistical model was developed, incorporating economic and institutional layers with variables such as physical capital, labor force, political institution quality, legal institution quality, and economic institution quality. Data were obtained from the World Bank’s World Governance Indicators and World Development Indicators, as well as the Heritage Foundation’s Index of Economic Freedom, covering the period from 1996 to 2022. The random effects model revealed the heterogeneous impact of institutional quality on total factor productivity (TFP), capital, and labor efficiency among the economies. Political institution quality was found to negatively affect TFP and capital efficiency but positively influence labor efficiency. The results also showed that legal institution quality positively affects TFP and capital efficiency but negatively influences labor efficiency, while economic institution quality negatively affects TFP and capital efficiency but positively influences labor efficiency. Theoretically, the integration of embeddedness, institutional quality, and factor efficiency into economic growth in a multilayer model offers a novel contribution. The findings also provide valuable insights for policymakers, emphasizing that institutions can leverage TFP and factor efficiency to attain high-quality economic growth.

Keywords

Asia Pacific; economic growth; embeddedness theory; Institutional quality
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Bing, Xia and Sieng, Lai Wei The Effect of Institutional Quality on Economic Growth: Evidence from 14 Asia-Pacific Economies. Jurnal Ekonomi Malaysia, –.

@article{bing2026the,
  title={The Effect of Institutional Quality on Economic Growth: Evidence from 14 Asia-Pacific Economies},
  author={Bing, Xia and Sieng, Lai WeiBing, Xia and Sieng, Lai Wei},
  journal={Jurnal Ekonomi Malaysia},
  volume={},
  number={},
  pages={—},
 
}

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