The Path of Efficiency in 18 Asian Economies and Regions: An Analysis of Energy, Industry, and Productivity

Abstract

Many Asian economies undergo rapid energy transition and industrial restructuring, which has become increasingly necessary to better understand how changes in energy structure and environmental constraints jointly influence industrial efficiency. Although the availability and quality of energy-related data have steadily improved, most studies rely on static or single-stage approaches, offering limited insight into the dynamic, multistage mechanisms linking energy development and industrial outcomes. This study investigates the impact of energy development on industrial efficiency using data from 18 Asian economies and regions. The analysis covers the period 2015–2020, a critical stage characterized by accelerated energy transition and climate policy adjustments in Asia. Methodologically, this study employs a two-stage dynamic nonoriented directional distance function model to evaluate efficiency changes at the stage and overall levels. By integrating intertemporal links and undesirable outputs into a multistage framework, the model extends conventional efficiency analysis and provides a more comprehensive assessment of energy–industry interactions. Furthermore, total factor productivity indices are applied to measure productivity changes, and Tobit regression is used to analyze how the energy intensity, renewable energy share, energy supply structure, and carbon emissions influence overall efficiency. The findings reveal significant regional disparities in efficiency across countries. They indicate that improving energy efficiency and accelerating the transition to cleaner and more diversified energy systems are essential for enhancing industrial performance under carbon constraints. These results provide empirical support for policymakers to design differentiated energy and industrial policies that promote sustainable development and low-carbon economic transformation in Asia.