Impact of globalization on productivity in ASEAN countries
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Globalization and Productivity Growth in ASEAN Countries
Positive Impact of Globalization on Economic Growth and Productivity
Research consistently shows that globalization has a significant positive effect on economic growth and productivity in ASEAN countries. Studies using various globalization indices—including economic, social, and political dimensions—find that increased globalization is associated with higher real GDP and GDP per capita across the region, indicating improved productivity and economic performance Sardiyo2019Suci2016Wahyudi2023+2 MORE. Economic and political globalization, in particular, are highlighted as strong contributors to growth, while the impact of social globalization is less consistent Suci2016Wahyudi2023.
Mechanisms: Technology, Human Capital, and Resource Allocation
Globalization enhances productivity in ASEAN by facilitating the diffusion of technology, improving the allocation of domestic resources, and encouraging capital inflows. The adoption of information and communications technology (ICT) and the spillover effects of human capital are especially important in driving productivity gains, as seen in the ASEAN-5 countries (Malaysia, Indonesia, Philippines, Singapore, and Thailand) . These factors help countries move from input-driven to more productivity-driven growth models, although the transition speed and effectiveness vary by country Ahmed2016Pratiwi2022.
Short-Term and Long-Term Effects of Economic Globalization
The impact of globalization on productivity and economic growth in ASEAN countries differs in the short and long term. In the short term, ICT and trade openness are significant drivers of GDP growth, while in the long term, economic freedom and financial openness play a more substantial role. However, some studies note that while ICT and financial openness boost growth initially, their long-term effects may be less pronounced or even negative, highlighting the need for balanced policy approaches Pratiwi2022Syahda2025.
Sectoral Insights: Banking and Environmental Considerations
In the banking sector, globalization has led to increased productivity, with Islamic banks in Southeast Asia showing higher productivity than conventional banks. However, social globalization can sometimes negatively affect conventional bank productivity, suggesting that the effects of globalization can vary across sectors and depend on specific institutional factors .
From an environmental perspective, globalization—through increased trade, foreign direct investment, and air transport—has contributed to economic growth but also presents challenges for environmental sustainability. While productivity and economic growth improve, there is a risk of increased ecological footprint and biocapacity deficits, especially in countries like Singapore, Malaysia, and Thailand. Nevertheless, higher labor productivity and globalization can help reduce these deficits by improving ecological quality over time Nguyen2022Celik2023.
Conclusion
Overall, globalization has played a crucial role in boosting productivity and economic growth in ASEAN countries by promoting technology transfer, better resource allocation, and increased capital flows. The effects are generally positive but can vary by country, sector, and over time. Policymakers should focus on leveraging the benefits of globalization while addressing sector-specific challenges and ensuring sustainable development.
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