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A panel investigation of the triple helix (TH), quadruple helix (QH)

relationship in ASEAN-5 economies

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 A PANEL INVESTIGATION
OF THE TRIPLE HELIX (TH),
QUADRUPLE HELIX (QH)
RELATIONSHIP IN ASEAN-5
ECONOMIES
Munshi Naser Ibne AFZAL
Faculty of Business, Economics & Accountancy
University Malaysia Sabah (UMS), Malaysia
Department of Economics
Shahjalal University of Science & Technology (SUST),
Sylhet, Bangladesh
School of Commerce, University of Southern Queensland,
Toowoomba, Australia
munshi.naser@ums.edu.my
Datuk Dr Kasim Bin HJ. MD. MANSUR
Faculty of Business, Economics & Accountancy
University Malaysia Sabah (UMS), Malaysia
kmansur@ums.edu.my
Shamim SIDDIQUI
School of Business and Quality Management
HBMSU, Dubai, UAE
S.Siddiqui@hbmsu.ac.ae
Jhalak GOPE
Shahjalal University of Science & Technology (SUST), Bangladesh
University Malaysia Sabah (UMS), Malaysia
jhalak.eco@gmail.com

ABSTRACT
This paper introduces a robust empirical investigation on Triple Helix, Quadruple Helix,
and their key drivers. The research questions are (i) how are Triple and Quadruple Helix
models characterized in general and in the context of ASEAN-5? (ii) How effective are the
relationships among the actors of different helixes in this region? The panel econometric
analysis with cross-sectional dependence (CD) test is used to investigate the relationship
and coevolution patterns within these. The empirical analysis employs innovation indi-
cators of five founding ASEAN countries, namely Malaysia, Indonesia, Singapore, the
Philippines, and Thailand, for the period 2000-2015, from an existing WDI, GEM and

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Munshi Naser Ibne AFZAL et al.

WCY database. Econometric results support the two research questions of this study; first
there is a significant relationship between the innovation outcome and its key drivers of
different helixes in ASEAN-5 economies. Second, the extent of the relationship within
government R&D expenditure in volume, post-school entrepreneurial education and
training, financing entrepreneurs with high-tech productions, is positive and significant,
while new ideas coming from universities in a number of scientific publications, existing
government support and policies, and internal market dynamics, have a weak impact on
high-tech production in ASEAN-5 countries.
KEYWORDS: ASEAN-5, Triple Helix (TH), Quadruple Helix (QH), Driscoll-Kraay
Standard Errors, Pooled OLS, Panel Data
JEL CODES: O20, O30, O57

According to the National Innovation System Triple and Quadruple Helix

Innovation Theory, a country’s economic structure is based on four pillars/
helices: Academia, Firms, Government and Civil Society, and economic
growth is generated by the clustering and concentration of talented and
productive people (Van Horne, Dutot, 2016). Creative cities and knowl-
edge regions are thus considered to be the true engines of economic growth.
Academia, government, society, and firms, together with the technological
infrastructures of innovation, provide an integrated innovation ecosystem
where all forms of creativity can grow (Afonso et al., 2012). In the existing lit-
erature, the relationship and interaction between different helices and inno-
vation output is not empirically tested, since the majority of studies lead to
fragile conclusions, due to data weakness and the non-existence of a robust
empirical model that highlights relations between the four different helices
in a National Innovation System (NIS).
This research is an attempt to explain the relationship of Triple and
Quadruple Helix actors and to empirically measure the extent of this rela-
tionship in the long run. Previous studies have postulated the concept more
theoretically, while this study is the first attempt to apply quantitative meth-
odology to investigate this concept empirically, considering the first five
founding Association of South East Asian Nations (ASEAN) economies,
namely Malaysia, Singapore, Indonesia, Thailand and the Philippines, as a
cross-sectional unit.
The research questions of this study are, first, how is the Triple and
Quadruple Helix model characterized in general and in the context of
ASEAN-5? To answer this question, research followed the framework of
Triple and Quadruple Helix model theory and a descriptive analysis. Second,
how effective are the relationships among the actors of different helixes in
this region? In order to find out the answer, this research applies econometric
techniques such as Panel Regression with Driscoll-Kraay standard errors.

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 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

Triple and Quadruple Helix theory is the sub-system, and yet it is the
very important component of the National Innovation System. Generally
speaking, the National Innovation System (NIS) of a country is composed of
different sub-systems, ranging from the economic regime, financial structure
and infrastructure, to the educational system, cultural traditions, and so on.
Thus, economic development is regarded as the interaction and co-evolu-
tionary process of these sub-systems (Freeman, 1987; Nelson, 1993). Lundvall
(1992) defines NIS as the elements and relationships which interact in the
production, diffusion and use of new and economically useful knowledge and
are either located within or rooted inside the borders of a nation state. In a
word, the National Innovation System is defined as the network of agents
and set of policies and institutions that affect the introduction of technology
that is new to the economy (Sharif, 2006; Etzkowitz, Leydesdorff 1997, 1998).
The accelerating growth of large developing countries (like Brazil,
Russia, India, China, South Africa, the BRICS) poses a major challenge for
ASEAN and other regions to stay competitive, and to catch up with growth.
Therefore, many economists (Stiglitz, Porter, Lundvall, Nelson, etc.) agree
that only high-quality, innovation-based growth, not just any growth, could
lead to long-term sustainable economic success. Among the East Asian
countries, Japan and South Korea actively build up their science, technology
and innovation (STI) capacity with catch-up industrialization policies. High
R&D funding (R&D expenditure as a percentage of GDP) has shown their
commitment to strengthening national innovation systems (Lundvall, 1992,
1993, 1998, 1999, 2003).
The relationship that appears in the Helixes generally stems from efforts
to solve the problem and produce a strategy when facing problems in innova-
tion, not determined from a certain pattern. Cooperation within government,
business, academia and intellectuals, known as the Quadruple Helix concept,
is necessary to build the foundations of a strong national creative industry.
In order to formulate the policy that supports the aforementioned strat-
egy, large ASEAN nations, namely Malaysia, Indonesia, Thailand, Singapore
and the Philippines, need to know where they stand, and about the gap that
exists in different helixes, to improve the innovation culture of the countries,
as well the region as a whole.
Finally, it is argued that the Triple and Quadruple Helix interactions are
an important factor in driving competition and economic growth. Therefore,
every nation needs policy coordination among the various agents participat-
ing in the innovation system to promote sustainable economic growth and
long-term competitiveness (Freeman, 1987; Lundvall, 1998). Our study will
illustrate this concept by organizing the article into eight major sections.

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Munshi Naser Ibne AFZAL et al.

First, Section 1 will introduce the concept and illustrate the research ques-
tions; Section 2, Theoretical Background; Section 3 will discuss a selec-
tion of the ASEAN-5; Section 4 will describe data and variables; Section 5,
Methodology; Section 6 illustrates empirical results and contains a discus-
sion; Section 7 will shed light on the contribution of the study, and finally,
Section 8 describes the conclusion and policy implications in finding out the
answers to the research questions in this study.

THEORETICAL BACKGROUND

Triple and Quadruple Helix Mechanism

The synergy among universities, government and industry is also known as
the Triple Helix. The Triple Helix approach was introduced by Etzkowitz
and Leydesdorff (1997, 1998, 2000). This Triple Helix model (TH) focuses on
the interaction among universities, industry and government, and considers
that these factors are the key to the improvement of conditions conducive to
innovation. Thus, all three have an important role to encourage the creation
of an advanced economic climate.
Etzkowitz and Leydesdorff (2000) also argue that universities, industry
and government are identified as the main pillars of many innovation system
theories, including NIS (Patel, Pavitt, 1994).
According to some authors (Khan, Al-Ansari, 2005; Liljemark, 2004; Van
Horne, Dutot, 2016), the long-term growth of innovation and the importance
of integrating the citizens’ perspective based on culture and social norms lead
to the quadruple helix model, adding one more helix to the original one.
Thus, some authors (Afonso et al., 2012; Carayannis, Campbell, 2009) argue
that the structure of an economy is divided into four helixes, consisting of
universities, industry, government and civil society, in which their relation-
ships generate innovation and economic development.
This whole process can start with a reverse system, for example an indi-
vidual at a firm might have a great idea for a technical process innovation
(knowledge stage). If his supervisor and colleagues support the idea (persua-
sion stage), the management may decide to contact a local university regard-
ing further research (decision stage). If the university has scientists and funds
(or a firm might need to provide funds) to do the required research, the com-
pany might implement a process invention (implementation stage) and later
on produce more advanced products. The company may also decide to apply
for a patent (confirmation stage) for the product innovation, with some sup-
port from local government institutions.

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 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

The company may also decide to export the patented products (confirma-
tion stage), assuming that the home country has a favorable trade relation-
ship with foreign countries or regions of interest. As described in the exam-
ple, there are many social, institutional and economic factors that may limit
or enhance the innovation diffusion process within the NIS (Bianchini,
Lissoni, Pezzoni, Zirullia, 2016).
Theoretically speaking, Romer’s (1990) new growth theory has been very
influential and inspired many econometric studies linking R&D, innovation,
and hence in the TH model.

JUSTIFICATION OF VARIABLE SELECTION

AND DESCRIPTIVE STUDY

Variable Selection
First, it is important to note that a wide definition of the innovation concept
(following Schumpeter and New Growth Theory) is used for the purpose
of this paper. Innovation could be defined as a new process, a new method
of production, a new market, a new source of supply, a new organization, a
new industry, and a new product (Schumpeter, 1942). Second, we assume
that innovation starts with an idea at individual/firm level following Rogers’
(2003) innovation diffusion model. Therefore, identifying major players and
diffusion channels in the innovation process is very important. Third, we
accept that there is no single best measure of innovation. Therefore, four dif-
ferent variables are used in this study to capture innovation at different inno-
vation diffusion stages following the innovation diffusion conceptual model.
Usually, in the case of finding the relationship between how the genera-
tion of ideas is linked with an industry outcome, the input-output indicators
of the NIS are mainly patents granted, scientific publications, and the output
of high-tech industries, which can all be considered (Hatzichronoglou, 1997;
Afzal, 2014; Afzal, 2013).
The number of employees in a firm can be considered as a proxy of its size
and industrial organization (Blau, Schoenherr, 1971) for which this research
uses labor productivity as a proxy for analysis.
R&D intensity was defined for a given sector as the volume of R&D
expenditure to value added. Later this method was expanded to take account
of the technology embodied in purchases of intermediate and capital goods.
This new measure could also be applied to the TH model as technology com-
mercialization, such as High-Tech products (Hatzichronoglou, 1997).

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Munshi Naser Ibne AFZAL et al.

Patents can be considered as being positioned in terms of the three social

coordination mechanisms of (1) wealth generation in the market by industry,
(2) legislative control by government, and (3) novelty production in academia.
Not only patents, but also university-industry relations, can be considered as
events in this space, whereas patents or high-tech products can be used as
output indicators for science and technology (Leydesdorff, Smith, 2014).
Labor productivity is the most controversial proxy for the innovation
explanatory variable because of the way it is calculated. However, Pires and
Garcia (2012) argue that productivity is responsible for technical efficiency,
innovation and growth differences between countries. Recent econometric
studies (Faustino, Matos, 2015; Lee, Narjako, 2015; Felsenstein, 2015) also
confirm that higher productivity may lead to process innovation. Labor
productivity may be increased by better human capital factors (Felsenstein,
2015), trade openness, higher R&D, and better quality of institutions
(Nelson, 2006). For the purpose of this paper we use labor productivity as
a measure of process innovation, since most of this might be unrepresented
by the most commonly used innovation measures like patents or high-tech
exports.
Scientific and technical journal publications are another recent and pop-
ular proxy measure of new idea generation in universities or research insti-
tutes. Castellacci and Natera (2013) define it as a result of research and devel-
opment funding from government activities by the public system. Cai (2011),
Pan Hung and Lu (2010) use it as a proxy for knowledge generation and
diffusion in the NIS efficiency analysis. As noted by Castellacci and Natera,
social cohesion and economic equality (free education), higher public spend-
ing on the education sector, may positively influence advanced knowledge
adoption, research and diffusion within the education sector and the coun-
try. Scientific publications may be a very important proxy to measure in a
macro level study to identify whether these ideas are actually generating or
linking the creative industries in individual countries or regions.
Scientific publications or new idea generation from higher education insti-
tutes can contribute an innovation outcome as already discussed, within the
innovation diffusion process context. However, this is not directly captured
by patents or high-tech exports, since there are many further steps and fac-
tors leading from scientific results/publications to actual patented products.
Therefore, scientific and technical journal publications are used as a separate
proxy for the research innovation explanatory variable in this paper.
High-tech or creative industries generally refer to the scope of the indus-
try in the automotive industry, the drug industry, the software industry, bio-
technology, and other industrial forms such as the creative industries. The

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 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

creative industries can be defined as a collection of economic activities asso-

ciated with the creation or use of knowledge and information. High-tech
exports are one of the most popular proxies for innovation and NIS efficiency
output (Afzal, 2013; Cai, 2011). Afzal and Lawrey (2012) consider high-tech
exports as the commercialization of valuable knowledge creation. Overall, a
variable of high-tech exports incorporates many aspects of private and pub-
lic-sector efficiency. A firm (or industry) is the most active player in the inno-
vation commercialization process, but the ability to sell high-tech products
in foreign markets also depends on many other factors like universities, trade
policy, supporting national institutions, chambers of commerce, embassies in
foreign countries, and Research and Development support from government
relations to help firms and industries reach international markets. High-tech
exports may also draw from previous innovation outcomes like research or
process innovation. Therefore, this is one of the most complete innovation
measures. For the purpose of this paper, we thus use high-tech exports vol-
ume measured in constant USD$ to capture the innovation outcome process
in ASEAN countries.
To maintain a proper quadruple helix model, social and governmental
elements are equally important to interact in a given setting (Arnkil, et al.,
2010). Knowledge generation and the innovation process span the social
environment in the presence of the Quadruple Helix Model (Carayannis,
Grigoroudis, 2016).
The Triple and Quadruple Helix Model features a few components sup-
porting a dynamic procedure prompting innovation. Leydesdorff (2010)
argued that the innovation process must be followed by some active mecha-
nisms which are promoted by the different helixes of the economy. As a result
of this mechanism, the ASEAN Economic Community (AEC) launched the
ASEAN STI Watch (Science, Technology and Innovation) to enhance the
technology and the R&D-based development of the region (ASEAN, 2017).
According to Wonglimpiyarat (2013), the STI mechanism is working as a
tool of capacity-building throughout the ASEAN region, also strengthen-
ing competitiveness and eventually followed by the TH/QH model in the
ASEAN community.

DATA SET AND SELECTION OF COUNTRIES

The data set consists of ASEAN-5 cross-country observations over the 2000-
2015 period obtained from the database of World Development Indicators (http://
data.worldbank.org/indicator); International Telecommunication Union
(ITU) (http://www.itu.int/); World Competitiveness Year Book (WCY), and the

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Munshi Naser Ibne AFZAL et al.

Global Entrepreneurship Monitor (GEM) database (see detailed variable and

data description in Appendix A).
ASEAN-5 (the founder nations of ASEAN) possesses some common
attributes. ASEAN-5 is endeavoring to lift itself from efficiency to a tech-
nology-driven economy (Afzal, Lawrey, 2014). These attributes are accepted
identically, from the economic to the social aspects. The ASEAN Free Trade
Area (AFTA) has been in operation since 1992 in order to bring down intra-
regional tariff charges. The governmental education expenditure of the
ASEAN-5 is around 20% of their total expenditure, except for the Philippines
(ASEAN Secretariat, 2014). Also, ASEAN would be considered as the sixth
largest global economy if it were a single country with a combined nominal
GDP of more than US$ 2,432 billion 1, measured in 2015. The prime export
of ASEAN-5 is high-tech products, except for Indonesia (Capannelli 2014).
The main exports of these countries are ICs (Integrated Circuits) and com-
puter data storage units (MIT, 2017). This indicates the strong technological
advancement of the ASEAN-5. Guerrero and Urbano (2017) also investi-
gated the influences of agents of the TH model in the context of the Mexican
entrepreneurial innovation performance. Like Mexico, ASEAN-5 is also an
emerging economic power and is expanding its economic capacity through
science, technology and innovation.
The ASEAN Economic Community (AEC) is heading towards technol-
ogy-driven production advantages. The AEC is trying to establish an eco-
nomic region with a high level of competition, which requires a policy that
includes competition policy based on an advanced innovation system at the
macro level.
Based on the ASEAN Economic Blueprint, the AEC becomes very nec-
essary to reduce the gap among ASEAN countries in terms of economic
growth. Thus, to address sustainable economic growth, the AEC can pro-
mote the concept of the Triple and Quadruple Helix model in this region.
Figure 1 shows the transition of the ASEAN-05 economies towards an inno-
vation-driven economy.
This study applies the cross-sectional dependency test in order to assure
the validity of the overall process. Cross-sectional dependency comes up with
a positive correlation between the variables of the ASEAN-5. This suggests a
stronger justification for using ASEAN-5 as a study area.

1.  Source: ASEAN Secretariat and IMF World Economic Outlook April 2016.

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 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

Figure 1  –  ASEAN Economic Development Transition

Source : ASEAN Secretariat, ASEAN, MIT Atlas, Thangavelu et al. (2015)

ECONOMETRIC METHODOLOGY
In this study, the model is estimated using panel data for five countries. The
panel data analysis allows the implication of data for N cross-sections (e.g.
countries), and T time periods. The combined panel data consist of a time
series for each cross-sectional member in the data set and offer a variety
of estimation methods (Asteriou, Hall, 2007). The main objectives of our
research are to find out the Triple and Quadruple Helix relationship in the
ASEAN-05 and how effective this relationship is in the long term. Therefore,
our panel econometric model can be given as follows in order to test the long
term associations of our variables to justify the research objectives:

HTE it = a + a1SJA it + a 2RDE it + a 3LPPit + a 4FFE it + a 5GSPit eq (1)

+ a 6PETit + a7CSN it + m it

Where the subscript i=1… N denotes the country (in our study, we
have five ASEAN countries) and t=1…T denotes the time period (our time
frame is 2000–2015), HTE is the high-tech export volume (in USD), RDE
is research and development expenditure (in volume USD), SJA as a proxy
of the number of scientific publications (absolute numbers), LPP is the over-
all labor productivity (absolute value as in the index), FFE is for financing
for entrepreneurs (absolute value as in index), the GSP proxy for govern-
ment support and policies (absolute value as in index), PET for post-school

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Munshi Naser Ibne AFZAL et al.

entrepreneurial education and training (absolute value as in the index), the

CSN as cultural and social norms the extent to which an entrepreneur is
allowed to invent a new business model (absolute value as in the index), and
finally µ is the error term in equation 1.

Cross-Sectional Dependence (CD) Test

A first strand of literature exploits panel data with time series procedures
developed to deal with non-stationary, spurious regression and cointegra-
tion (Kao, Chiang, 2000). Another line of research developed both within
and outside the framework of non-stationary panels concerns cross-sectional
dependence (Bai, Ng, 2004; Peterson, 2007; Driscoll, Kraay, 1998). It is com-
monly assumed that distribution in panel data models is cross-sectional inde-
pendent, especially when the cross-section dimension (N) is large. However,
sometimes we have found evidence of Cross-sectional Dependence (CD) in
the panel data set. In order to test whether or not the residuals from a panel
estimation of the regression model are spatially independent, the authors
performed Pesaran’s (2004) CD test. The null hypothesis of the CD test
states that the residuals are cross-sectionally uncorrelated. Correspondingly,
the test’s alternative hypothesis presumes that spatial dependence is present
(Afzal, Gow, 2016).
In this study, Pesaran’s test of cross-sectional independence = 2.077,
Pr = 0.0378, average absolute value of the off-diagonal elements = 0.160.
On average, the (absolute) correlation between the residuals of two stocks
is 0.354. Therefore, it comes as no surprise that Pesaran’s CD test rejects the
null hypothesis of spatial independence on any standard level of significance.
As a result, our panel model should be estimated with Driscoll-Kraay stand-
ard errors since they are robust to very general forms of cross-sectional and
temporal dependence (Driscoll, Kraay, 1998).
Pesaran’s test of cross-sectional independence = 10.02, Pr = 0.000
Average absolute value of the off-diagonal elements = 0.486
Therefore, this research follows the regression model by pooled OLS with
Driscoll and Kraay standard errors. Somewhat arbitrarily, a lag length of 8
is chosen. However, the results turn out to be quite robust to changes in the
selected lag length.

Panel Unit Root Test

In order to understand whether there is a long-term relationship between all
the variables, applying the cointegration test, we should check whether all

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 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

the variables are stationary at level or not. If these series are not stationary at
level, it should be preceded by first difference to obtain stationary positions.
When all the series become stationary at first difference level, we can use the
co-integration test (Dickey, Fuller, 1981; Phillips, Perron, 1988). However, in
the presence of cross-sectional dependence, we cannot apply the conven-
tional unit root test. In this case, this study applied (Westerlund, 2007) the
second-generation unit root test in the presence of cross-sectional depend-
ence (Levin et al., 2002).

EMPIRICAL RESULTS

Results of Panel Unit Root Tests

To investigate the stationarity of the series used, we applied the unit root
tests to panel data in the presence of cross-sectional dependence. The results
of these tests are presented in the following table:

Tableau 1  –  Results for panel unit root tests

(Level and First Differences) in the presence of CD

Test
Variables Level First Difference
T-Statistics p-value T-Statistics p-value
HTE -2.20 0.153 -1.77 0.446
RDE -3.08 0.002 -2.92 0.006
SJA -1.91 0.343 -2.69 0.021
LPP -3.01 0.003 -1.63 0.531
FFE -1.56 0.004 -1.78 0.756
GSP -3.45 0.004 -2.76 0.007
PET -3.09 0.006 -2.78 0.008
CSN -2.38 0.165 -1.89 0.556
Source : Author calculation

In Table 1, all the variables are not non-stationary at level or first differ-
ence. In order to run the co-integration test, there must be two conditions,
(Phillips, Moon, 1999; Stock, Watson, 1993; Saikkonen, 1991; Mark, Sul
2003). Variables at level (1) are non-stationary or have a unit root. But at first
difference, they become stationary.
This study cannot find the presence of the above conditions. Therefore,
we cannot apply the conventional co-integration test in the presence of CD.
According to Pedroni’s Residual-Based Panel Co-integration Tests (1999,
2004), Kao (1999), Kök et al., (2010), Granger (1969), Engle and Granger

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Munshi Naser Ibne AFZAL et al.

(1987), Johansen (1991), Philips and Ouliaris (1990), Lee, (2005), Adhikari
and Chen, (2012), Jebli and Youssef (2015) have mentioned cases like this;
the research should apply the Error Correction Model (ECM) like Driscoll-
Kraay standard errors estimations in the pooled OLS model.

The Regression with Driscoll-Kraay Standard Errors

Estimations with Presence of CD
Driscoll and Kraay (1998) standard errors for coefficients estimated by pooled
OLS/WLS or fixed-effects (within) regression. The error structure is assumed
to be heteroskedastic, auto- correlated to some lag, and possibly correlated
between the groups (panels). These standard errors are robust to general
forms of cross-sectional (spatial) and temporal dependence. Because this non-
parametric technique of estimating standard errors places no restrictions on
the limiting behavior of the number of panels, the size of the cross-sectional
dimension in finite samples does not constitute a constraint on feasibility.
Usually the DOLS, PMG, FEM estimator assumes that all cross-sectional
units are independent. In many cases, this assumption is clearly unrealistic
from both the economic and econometric points of view. First, the independ-
ence assumption is often at odds with economic theory. For instance, accord-
ing to many economic models, agents tend to interact within and between
cross-sections. Second, spatial dependence could also be the consequence of
unobserved heterogeneity due principally to omitted observed common fac-
tors, spatial spillover effects, unobserved common factors, or general residual
interdependence (Pesaran, 2004). In some cases, standard techniques that
do not take account of this dependence would yield inconsistent estimates
of the parameter standard errors, producing incorrect inference and test sta-
tistics. Consequently, in order to correct for the presence of cross-sectional
dependence, we employ a DK estimator.
The Regression with Driscoll-Kraay standard errors estimations and the
results are presented in Table 2.
Results for Pooled OLS using Driscoll-Kraay (DK) standard errors estima-
tions from Table 2 show that the elasticity of SJA across the panels was cal-
culated as 0.0081. This means that a 1% increase in scientific publications in
universities or research centers in the ASEAN-5 countries generates approxi-
mately a 0.0081% increase of value-added high-technology production. The
variable is not significant at the 5% and 10% level, which implies that there
is no significant impact on high-tech goods production from university or
research center publication outcomes in ASEAN. This also tells the story
that the link between university and industry collaboration is not so solid.
This is an interesting finding from our research.

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Tableau 2  –  Results for Pooled OLS in the presence

of Cross-Sectional Dependence

Dependent Variable: HTE

Method: Driscoll-Kraay standard errors estimations in Pooled OLS
Variable Coefficient Std. Error t-Statistic Prob.
SJA 0.0081 0.0047 1.76369 0.651
RDE 0.024 0.0456 3.147581 0.007
LPP 1.7865 0.3674 0.394512 0.008
FFE 0.0025 0.0014 1.82 0.088
GSP -3.01 5.86 -5.14 0.000
PET 1.15 2.85 0.40 0.094
CSN -1.18 1.50 -0.78 0.446
C 5.91e+10 3.34e+10 1.77 0.097
R-squared 0.9403 Root MSE 14.19
Adjusted
0.345 Prob > F 0.000
R-squared
Source : Author calculation

Elastic coefficients of R&D are calculated as 0.012%. Therefore, an

increase of 1% in R&D constitutes a positive effect on high-tech production
at the rate of approximately 0.012%. On the other hand, a 1% increase in
Lobar productivity (LPP) causes 1.78% increases of high-tech productions in
the long run.
Elastic coefficients of FFE are calculated as 0.0025%. Therefore, an
increase of 1% in FFE constitutes a positive and significant effect on high-
tech production at the rate of approximately 0.0025%. Elastic coefficients
of GSP are calculated as -3.01%. Therefore, an increase of 1% in GSP con-
stitutes a negative and significant effect on high-tech production at the
rate of approximately -3.01%. This implies that government support and
policies in ASEAN as a whole are not yet in favor of high-tech production.
This can also lead us to understand the weak linkage between idea genera-
tion and the commercialization process in this region. The existing gov-
ernment support may be good for Singapore or Malaysia; however, it may
not be working in Indonesia or the Philippines as a whole. Etzkowitz, et al.
(2005) found that an innovation mechanism is asymmetrically effective in
some regions, where it may be more symmetrical in other regions, even if
a common TH model exists. Therefore, the result of our study reveals the
negative relationship between government support and policies and high-tech
production.
Elastic coefficients of PET are calculated as 1.15%. Therefore, an increase
of 1% in post-school training constitutes a positive and significant effect on
high-tech production. Finally, Elastic coefficients of CSN are calculated as
-1.18%. Therefore, an increase of 1% in the Socio-cultural norms condition

pre-published – Journal of Innovation Economics & Management 2018 XIII

Munshi Naser Ibne AFZAL et al.

constitutes a negative and insignificant effect on high-tech production at the

rate of approximately 1.18%. Cultural and Social Norms, meaning that the
extent to which social and cultural norms encourage or allow actions lead-
ing to new business methods, is implicitly related to government support and
policies. Therefore, unsuitable existing government policies may lead to a
poor domestic market demand and supply condition of high-tech production
in ASEAN-5, which in turn discourages entrepreneurs from inventing new
business models or innovating. This also implies that, apart from Singapore,
the other four large economies are still struggling to produce a significant
large volume of value-added high-technology production based on the per-
formance of a number of scientific publications and current government poli-
cies in this region (Wonglimpiyarat, 2013).
According to the test results of the DK estimation, in the long run, RDE,
FFE, PET and LPP affect high-tech goods production significantly, both in a
positive and statistical way, as expected. Furthermore, the findings indicate a
positive relationship between scientific publications, mostly from the univer-
sities (SJA), and high-tech goods production (HTE), but this is statistically
non-significant. Moreover, existing government support and policies and cul-
tural and social norms exhibit a negative relationship which indicates a weak
Triple or Quadruple Helix relation in ASEAN-5. These results can be taken
as important findings for policy makers in this region.

CONTRIBUTION OF THIS STUDY

This paper makes three major contributions to the literature. First, while
most authors have studied the relationship between NIS, TH and QH at
the country or sector level for developed economies there has been little
known about this relationship for ASEAN countries until now. Emerging
economies are currently adopting mobile phone usage, internet connections,
post-school training, government support policies, the internal dynamics of
domestic market, and are importing ICT goods much faster than developed
economies. The impact that ICT adoption under NIS has on the TH or QH
relationship in emerging economies is an important yet under-studied area.
Second, this paper presents what is believed to be the first panel data study
of the concept of the NIS, TH and QH relationship and the first from the
perspective of the ASEAN-5 countries.
Third, a limitation of homogenous panel data approaches such as the
DOLS, PMG technique allows the intercept to differ while constraining all
other parameters to be the same, thus still imposing a high degree of homo-
geneity but ignoring the potential cross-sectional heterogeneity in the panel.

XIV pre-published – Journal of Innovation Economics & Management 2018

 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

Therefore, we have applied the recent DK model by Driscoll and Kraay (1998)
where these standard errors are robust to general forms of cross-sectional
(spatial) and temporal dependence when the time dimension becomes large.
Because this nonparametric technique of estimating standard errors places
no restrictions on the limiting behavior of the number of panels, the size of
the cross-sectional dimension in finite samples does not constitute a con-
straint on feasibility over panel set. The cross-sectional dependence (CD) test
has been done by Pesaran’s test of cross-sectional independence (Peterson,
2007; Chuah et al., 2016).
One limitation of the study may be that the data sample is small, due
to missing data that required the application of more econometric methods
to test the hypothesis. Usual variables, like tertiary educational expendi-
ture, the skills of the labor force, schooling at tertiary level, are important
to test our objective of the study. This is due to data unavailability for all the
ASEAN-5-member countries, which does not allow us to incorporate these
variables in our analysis. In the future, the first difference GMM method
with short time span, and the panel dynamic ordinary least square technique
(DOLS) for testing the VECM model to check the serial correlation prob-
lem, and the variance decomposition model to investigate the pass-through
of external shocks to each variable in the model, could be deployed. Finally,
our results and discussion show that the most important contribution to
high-tech productions as a proxy of innovation output has been made by the
volume of R&D expenditure, financing entrepreneurs, post-school entrepre-
neurial training, and education and labor productivity. The scientific publi-
cations, existing government supports and policies, and Cultural and Social
Norms have a weak impact on high-tech productions in ASEAN-5. This is in
line with the research of Hassan and Bakri (2016); Chuah et al. (2016); Din,
Anuar and Usman (2016); Yaacob, Shaupi and Shuaib (2016); Mulyaningsih
(2015). It is very important to achieve strong and robust collaboration among
government-industry-society and university relationships for the long-term
sustainable economic growth of this region.

CONCLUSION AND POLICY DISCUSSIONS

Nowadays, to achieve a competitive economy, the focus should be oriented
toward the National Innovation System (NIS) with some key factors, such
as high technology-based value-added products, R&D, new idea generation
through scientific publications, post-school entrepreneurial education, gov-
ernment support and policies, internal market dynamics, financing entrepre-
neurs, and overall labor productivity.

pre-published – Journal of Innovation Economics & Management 2018 XV

Munshi Naser Ibne AFZAL et al.

In this context, technology-based production from high-tech industry,

backed by government and universities (following the theory of the Triple
and Quadruple Helix model) can be a powerful way to develop the knowl-
edge economy, which in turn can increase competitive performance and the
long-term economic development in the ASEAN region.
In fact, the development of NIS quality depends mainly on focusing on
innovation activity. Actually, new ideas and R&D play a key role in the
future development of higher education institutions and represent a catalyst
for innovation and excellence in this sector.
The aim of this study was to investigate the link between innovation
output, government support for innovation, and new idea generation from
higher education institutes under the National Innovation and Triple and
Quadruple Helix context in ASEAN-5 countries over the period 2000-2015.
Our results provide evidence that economically value-added technology-
based production depends on new ideas from universities, government R&D
expenditure, post-school entrepreneurial education and training, financing
entrepreneurs, and overall labor productivity in the large ASEAN econo-
mies. Although the link between ideas coming from higher education insti-
tutes and transferred to high-tech industries is not yet strongly formed in
ASEAN-5, due to inadequate government support and policies and poor
Cultural and Social Norms dynamics. This is a major empirical finding from
our research.
The empirical results support our research questions in this study by
exhibiting the relationship between innovation outcome and its key driv-
ers under the triple and quadruple helix context of the National Innovation
System in ASEAN-5 economies. ASEAN-5 countries can take some meas-
ures suggested by Triple and Quadruple Helix literature, first, establishing a
fair sharing arrangement for royalty payments to researchers also increases
their interest and commitment to the commercialization process. Second, a
further incentive mechanism that can be introduced as an appraisal system
for academics, based not only on traditional teaching and research metrics,
but also considering the relevance of their research to industry (Debackere,
Veugelers, 2005; Laukkanen, 2003). This research believes that an innova-
tion strategy centered on the Triple and Quadruple Helix systems can be
an attractive perspective, especially for regions that aim to enhance their
knowledge-based economy around research themes with commercial poten-
tial, and innovative firms that could realize that potential.
It is acknowledged that R&D investment has a direct impact over innova-
tion and industrial activity in the long run. Insufficient, or a lack of a rigor-
ous dataset of R&D investment, was a hindrance to measuring the long-term

XVI pre-published – Journal of Innovation Economics & Management 2018

 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

impact of the R&D and innovation relationship. As a result, this research

attempted a sophisticated empirical analysis using different effective methods
for a robust result. Also, the lack of social and cultural factors such as the inno-
vation culture within the industry, university and government policy, social
motivational factors for innovation, institutional regimes, regulatory factors,
political stability and foreign policy, etc., were not considered in this research
due to a lack of data across all countries. This is perhaps the main limitation
of this study. To overcome this limitation, a future researcher can pursue a
primary survey method at micro level to identify the aforementioned factors
to better understand the dynamics of the Triple and Quadruple Helix system
and develop an overall innovation policy for the nation as well as the region.

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 Triple/
Variable Volume/

XXII
Serial Quadruple Code Description Source/Reference
name Index
Helix Model
Independent Variable(s)
Scientific and technical journal articles
refer to the number of scientific and
National Science Foundation,
Scientific Absolute engineering articles published in the
Science and Engineering
Appendix

01 University SJA and technical value (in following fields: physics, biology,
Indicators.
journal articles numbers) chemistry, mathematics, clinical medicine,
(WDI)
biomedical research, engineering and
technology, and earth and space sciences.
Munshi Naser Ibne AFZAL et al.

Patent applications are worldwide patent

World Intellectual Property
applications filed through the Patent
Organization (WIPO), WIPO
Cooperation Treaty procedure or with
Patent Report: Statistics
a national patent office for exclusive
on Worldwide Patent
Appendix A – Variables

Patent Absolute rights for an invention - a product or

Activity. The International
02 University PAR applications, value (in process that provides a new way of doing
Bureau of WIPO assumes no
residents numbers) something or offers a new technical
responsibility with respect to
solution to a problem. A patent provides
the transformation of these
protection for the invention to the owner
data.
of the patent for a limited period, generally
(WDI)
20 years.
Labor Estimates: GDP (PPP) per person IMD WORLD
03 Companies LPP productivity Index employed per hour, US$ (Updated: MAY COMPETITIVENESS ONLINE
(PPP) 2012) 1995 - 2013
Expenditure for research and development
are current and capital expenditure (both
public and private) on creative work United Nations Educational,
Total
undertaken systematically to increase Scientific, and Cultural
expenditure on Absolute
04 Govt. RDE knowledge, including knowledge of Organization (UNESCO)
R&D (constant value
humanity, culture, and society, and the use Institute for Statistics.
USD$)
of knowledge for new applications. R&D (WDI)
covers basic research, applied research,
and experimental development.

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 The availability of financial resources
Financing for equity and debt “for small and medium http://www.gemconsortium.
05 Companies FFE Index
entrepreneurs enterprises (SMEs) (including grants and org/data/key-nes
subsidies)
Governmental The extent to which public policies support
http://www.gemconsortium.
06 Govt. GSP support and Index entrepreneurship - entrepreneurship as a
org/data/key-nes
policies relevant economic issue
The extent to which public policies
Taxes and support entrepreneurship - taxes or http://www.gemconsortium.
07 Govt. TXB Index
bureaucracy regulations are either size-neutral or org/data/key-nes
encourage new and SMEs
The presence and quality of programs
Governmental http://www.gemconsortium.
08 Govt. GVP Index directly assisting SMEs at all levels of
programs org/data/key-nes
government (national, regional, municipal)
Basic school The extent to which training in creating or
entrepreneurial managing SMEs is incorporated within the http://www.gemconsortium.
09 University BET Index
education and education and training system at primary org/data/key-nes
training and secondary levels.
The extent to which training in creating or
Post- school
managing SMEs is incorporated within the
entrepreneurial http://www.gemconsortium.
10 University PET Index education and training system in higher
education and org/data/key-nes
education, such as vocational, college,
training
business schools, etc.
The extent to which national research and
http://www.gemconsortium.
11 University RDT R&D transfer Index development will lead to new commercial
org/data/key-nes
opportunities and is available to SMEs

pre-published – Journal of Innovation Economics & Management 2018

Commercial The presence of property rights,
and commercial, accounting and other legal http://www.gemconsortium.
12 Companies CPI Index
professional and assessment services and institutions org/data/key-nes
infrastructure that support or promote SMEs
The extent to which
Society & Cultural and social and cultural norms encourage or http://www.gemconsortium.
13 CSN Index
Culture Social Norms allow org/data/key-nes
actions leading to new business methods

XXIII
in asean-5 economies
A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
 http://www.gemconsortium.
Internal market The extent to which new firms are free to
14 Companies IMO Index org/data/key-nes

XXIV
openness enter existing markets

Ease of access to physical resources

Physical http://www.gemconsortium.
“communication, utilities, transportation,
15 Govt. PSI and services Index org/data/key-nes
land or space” at a price that does not
infrastructure
discriminate against SMEs
Dependent Variable(s)
High-technology exports are products
High-
with high R&D intensity, such as in
technology Absolute Database of the WITS
16 Companies HTE aerospace, computers, pharmaceuticals,
exports Volume platform including (WDI).
Munshi Naser Ibne AFZAL et al.

scientific instruments, and electrical

(constant US$)
machinery. Data are in current U.S. dollars.

pre-published – Journal of Innovation Economics & Management 2018

 A panel investigation of the triple helix (TH), quadruple helix (QH) relationship
in asean-5 economies

Comparison Data Figures

Figure 2  –  Scientific and Technical Journal Articles

Source : Author calculation

Figure 3  –  Patent Applications, Residents

Source : Author calculation

pre-published – Journal of Innovation Economics & Management 2018 XXV

 Munshi Naser Ibne AFZAL et al.

Figure 4  –  High-Technology Exports (% of manufactured exports)

Source : Author calculation

Figure 5  –  Labor Productivity

Source : Author calculation

XXVI pre-published – Journal of Innovation Economics & Management 2018

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