Exploring Green Economy Adoption and Sustainable Performance of Yogyakarta MSMEs: The Role of Digital Transformation
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Abstract
Micro, Small, and Medium Enterprises (MSMEs) are fundamental to Indonesia’s economic resilience, contributing substantially to employment and national growth. However, intensifying environmental pressures and global sustainability mandates increasingly require these enterprises to adopt green business practices. Concurrently, the rapid proliferation of digital technologies presents new pathways for MSMEs to enhance operational efficiency and support sustainable development. Although the intersection of digitalization and sustainability has gained scholarly attention, qualitative inquiries into how Indonesian MSMEs strategically integrate both domains to improve sustainable performance remain scarce. This study addresses this gap by exploring the experiences, perceptions, and strategic approaches of MSMEs in Yogyakarta regarding green economy adoption and the enabling role of digital transformation. Employing a qualitative multiple-case study design, data are collected through semi-structured interviews, field observations, and document analysis with MSME owners across diverse industrial sectors that have implemented both eco-friendly initiatives and digital tools. Thematic analysis is applied to identify patterns in digital readiness, organizational capabilities, environmental actions, implementation barriers, and sustainability outcomes. Grounded in the Resource-Based View (RBV), Dynamic Capability Theory (DCT), and Triple Bottom Line (TBL) framework, this study posits that digital transformation enhances MSMEs’ capacity to execute green strategies, improve resource efficiency, reduce ecological footprints, and generate long-term economic and social value. The expected findings aim to enrich sustainability management literature and offer actionable insights for MSME managers, policymakers, and development agencies seeking to foster digital-enabled green transitions in emerging economies.
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