THE ROLE OF DIGITAL TECHNOLOGY IN ENHANCING INDUSTRIAL ENERGY CONSUMPTION EFFICIENCY IN EMERGING MARKETS

Abstract

This paper investigates the role of digital technology in enhancing industrial energy consumption efficiency in emerging market economies. Using panel data from Indonesia, India, and Vietnam covering the period 2019–2023, the study applies panel data regression alongside Quantile Regression for Panel Data (QRPD) to account for distributional heterogeneity in energy efficiency outcomes. The empirical results reveal that digital investment and automation adoption significantly reduce industrial energy consumption intensity, indicating substantial efficiency improvements. In contrast, GDP per capita shows a negative but statistically insignificant association with energy efficiency. The quantile regression estimates further demonstrate that the efficiency-enhancing effects of digitalization are more pronounced at lower and middle quantiles of the energy efficiency distribution, while diminishing at higher quantiles, suggesting decreasing marginal returns in relatively energy-efficient industries. Trend analysis and graphical evidence corroborate these findings by illustrating a consistent inverse relationship between digital investment, automation, and industrial energy intensity. Overall, the study provides robust empirical evidence that digital transformation constitutes a key mechanism for improving industrial energy efficiency and supporting sustainable industrial development in emerging markets