By incorporating current crowding effect into the conventional ABC model, we theoretically and directly uncover the black box of the relationship between the current diffusion and the internal quantum efficiency, light extraction efficiency, and external quantum efficiency droop of the light emitting diodes (LEDs). A general formula for the current diffusion length ( $L_{s}$ ) has been derived. The design strategies on the current blocking layer and the transparent conductive layer to increase the $L_{s}$ have been analyzed. The impact of the vertical resistance ( $R_{s}$ ) on the LED wall-plug efficiency (WPE) has also been addressed. We have found there exists an optimized $R_{s}$ , and the LED WPE is not always monotonically increasing as the $R_{s}$ decreases. Besides, our previous experiment results have been summarized to verify the theoretical analysis.