Reckonings of Environmental Efficiency and Convergence in Asian-Pacific Region: A Malmquist- Luenberger Approach

The second wave of industrialization at the end of the last century brought the attention of researchers to the effect of more energy usage and its effects on environmental degradation. It was also highlighted in the 2030 agenda for sustainable development goals (2015) that environmental degradation threatens humans’ well-being unless countries use environment-friendly production processes. The present study has used the Malmquist-Luenberger Index (MLI) to estimate the environmental efficiency of the Asia-Pacific (APAC) region for the period 1990 to 2019. The estimated results showed that the environmental efficiency of APAC countries declined by 0.36%, on average, in the studied period. The results also highlighted that the Republic of Korea has the highest total factor productivity (TFP) output growth rate in the APAC region. In contrast, Lao People’s DR and the Maldives have the lowest TFP. Conditional, unconditional, and Club convergence tests are also tested for the APAC region. The results also suggested that convergence in environmental efficiency is conditional on trade openness, industrial growth, and energy prices. Some policies are also suggested for the APAC region at the end of the study.