Artificial intelligence cooperation and domestic absorptive capacity: evidence from ASEAN economies

Cross-border artificial intelligence (AI) cooperation is expanding, but evidence on its effect on domestic technological capability in recipient economies is scarce. Drawing on absorptive capacity theory, we create a composite AI absorptive capacity index for 10 Association of Southeast Asian Nations (ASEAN) economies, encompassing innovation foundations, application foundations and industrial support. We measure bilateral AI cooperation intensity via co-publications, co-patents and investment linkages. Using a 2015-2025 bilateral panel with fixed-effects and three-way fixed-effects models, we find a positive association between cooperation intensity and absorptive capacity, robust across all three index dimensions and to sample restrictions and winsorization. Heterogeneity analysis shows that China-related cooperation offers no general premium. A more favourable link emerges only in economies with weaker initial industrial foundations, and it is fragile under stricter sample restrictions. The findings imply that the developmental value of AI cooperation hinges not on cooperation volume but on embedding external knowledge into domestic learning, application and industrial adaptation systems.