Trade integration and energy intensity in ASEAN: the moderating role of the digital economy

Abstract

The rapid expansion of trade in ASEAN economies has intensified concerns about rising energy consumption and environmental sustainability. While trade integration is essential for economic growth, its impact on energy intensity remains a topic of debate, particularly in the context of digital transformation. Yet, limited attention has been given to how the deeper dimensions of trade integration, the digital economy, and energy price fluctuations jointly shape energy intensity. This study aims to investigate the moderating role of the digital economy in the trade-energy nexus, incorporating different crude oil price benchmarks to capture energy market dynamics. Using a panel dataset of 10 ASEAN countries from 2000 to 2021, the study employs a novel Panel Quantile Autoregressive Distributed Lag estimation to uncover the relationship between these variables in the ASEAN economies. The findings reveal that trade integration significantly affects energy intensity, but the presence of a robust digital economy mitigates this effect, promoting energy efficiency. This implies that in economies with weaker digital infrastructure, trade integration contributes to higher energy intensity. Moreover, crude oil price fluctuations and economic growth play varying roles in shaping energy intensity across different quantiles. These results highlight the importance of digital infrastructure investments in fostering sustainable trade-led growth. The study recommends that policymakers should prioritize ICT-driven trade strategies, energy-efficient technologies, and digital supply chain solutions to optimize trade’s energy impact. By integrating digital innovations, ASEAN economies can achieve a balance between economic expansion and environmental sustainability.