Efficiency and sustainability in the real estate industry: a three-stage analysis framework

Real estate industry plays a significant role in economic development. However, in the context of sustainable development, the environmental performance of an industry is a key indicator. This study develops a focused performance model to assess the economic and environmental efficiencies of the real estate industry. This study applies a three-stage analytical framework that integrates data envelopment analysis, Malmquist productivity index, and a panel regression model to evaluate green production efficiency. The results indicate that environmental efficiency scores are relatively higher than economic efficiency scores within the sample frontier, suggesting lower dispersion in environmental efficiency among firms. Furthermore, overall productivity growth is driven primarily by efficiency changes rather than technological progress. Return on assets shows a positive and marginal relationship with environmental efficiency, whereas firm size has no significant effect. In addition, the leverage ratio does not significantly influence environmental efficiency. Finally, improving managerial efficiency and profitability is more important than expanding the firm size. Firms and policymakers should enhance their resource allocation efficiency while maintaining environmental performance to facilitate short-term operational adjustments and foster preliminary signs of sustainable transition in the real estate industry.