Does Artificial Intelligence Foster Economic Growth and Financial Efficiency? Comparative Evidence from Emerging Asia

Abstract

This paper illustrates the changing nature of economics and finance in relation to artificial intelligence (AI) and its quantifiable effect on the growth and market efficiency in China, India, Malaysia, and Pakistan between 2015 and 2024. Quantitative panel data approaches are to represent linear and nonlinear dynamics. The secondary data were collected by the World Bank, IMF, OECD, and the Stanford AI Index that included AI adoption, human capital, digital infrastructure, and indicators of institutional quality. The findings show that the adoption of AI has a strong positive impact on macroeconomic performance and efficiency in the financial system, and its most powerful impact in those countries that have high-level digital and educational infrastructure. Comparison between China and Malaysia reveals that these two countries are the leaders in AI integration in the region with Pakistan and India displaying an emerging but disproportionate development. The results highlight the importance of AI in facilitating sustainable economic change, financial modernization and inclusive growth in Asia. The paper provides empirical evidence to the emerging research on AI economics and can provide practical implications to policymakers to utilize digital technologies to create long-term economic resilience.