Social Innovation as a Bridge: The Impact of Social Expenditure, Trade Openess, Economic Disparity and Institutional Reform on Social Welfare in Asean Countries
DOI:
https://doi.org/10.24252/ecc.v12i2.59032Keywords:
Social innovation; community welfare; socio-economic outcomes; trade openness; institutional qualityAbstract
Developing countries in the ASEAN region face complex challenges in achieving inclusive and sustainable development, amid socioeconomic inequality, institutional limitations, and global trade dynamics. Social innovation has emerged as an alternative approach capable of bridging various structural factors to improve community welfare. This study aims to analyze the mediating role of social innovation in the relationship between Social Expenditure, socio-economic conditions, trade openness, income inequality, and institutional quality in five ASEAN countries (Indonesia, Malaysia, Thailand, Singapore, and the Philippines). The research method employs a ten-year panel data design (2014–2024) using secondary data from the World Development Indicators (World Bank). Analysis is conducted using Structural Equation Modeling (SEM) to estimate direct and indirect effects. The results show that social innovation plays a significant role in improving community welfare and inclusive economic performance, especially when supported by social expenditure, institutional quality, and conducive socio-economic conditions. Conversely, trade openness and income inequality do not have a direct effect on social innovation. These findings confirm that social innovation is more effective as a mediator when supported by strong structural factors. The recommendations from the findings emphasize the importance of strengthening institutional capacity, providing a sustainable innovation ecosystem, and integrating social innovation into national development strategies to accelerate the realization of inclusive and sustainable development in the ASEAN region.
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