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Vol 41 No 2 (2026): May

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Submitted
Nov 7, 2023
Accepted
Sep 8, 2025
Published
May 26, 2026
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The Digital Economy and Green Economic Growth in Indonesia: Spatial Spillover and Nonlinear Effects

https://doi.org/10.22146/jieb.v41i2.10469
Fitri Handayani
fhandayani@bps.go.id
BPS-Statistics of South Kalimantan Province, Banjarbaru, 70713, Indonesia

Corresponding Author(s) : Fitri Handayani

fhandayani@bps.go.id

Journal of Indonesian Economy and Business, Vol 41 No 2 (2026): May

Abstract

Introduction/Main Objectives: This study aims to investigate the digital economy and its spatial effects on green economic growth in Indonesia. It also explores nonlinear or U-shaped effects of the digital economy. Background Problem: The research addresses the background problem of balancing economic growth and environmental sustainability, emphasizing the spatial interdependencies in the digital economy's impact on green economic growth. Understanding these spatial effects is crucial for designing effective regional policies. Novelty: The novelty of this study lies in its examination of the impact of the digital economy on green economic growth using an aggregate index constructed using the Entropy value method. Furthermore, spatial effects are incorporated to account for interdependencies among regions. Research Methods: Spatial analysis using the spatial Durbin model with random-effects models is employed to analyze the data. Findings/Results: Empirical findings from this study indicate a negative impact of the digital economy on green economic growth in Indonesia. Moreover, the study confirms the presence of a nonlinear relationship, specifically a U-shaped effect between the digital economy and the environment-economy index. The coefficients of spatial effects, encompassing both the digital economy and green economic growth, demonstrate significant influences on this relationship. Conclusion: Currently, Indonesia finds itself in the early evolutionary stage of digitalization, which has potential to improve the green economy in the longer term. Optimizing the digital economy is imperative to mitigating unsustainable outputs and inputs in the manufacturing process. Furthermore, achieving a sustainable economy necessitates considering the effects of other regions on local green economies, emphasizing the importance of understanding spatial interdependencies.

Keywords

Digital economy spatial effects green economy
Handayani, F. (2026). The Digital Economy and Green Economic Growth in Indonesia: Spatial Spillover and Nonlinear Effects. ournal of ndonesian conomy and usiness, 41(2), 282 -. https://doi.org/10.22146/jieb.v41i2.10469
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Author Biography

Fitri Handayani, BPS-Statistics of South Kalimantan Province, Banjarbaru, 70713, Indonesia

Fitri Handayani is a statistician at BPS-Statistics Indonesia, South Kalimantan Province, Indonesia. She is currently involved in statistical analysis and development, sectoral statistics development, and institutional reform initiatives. She earned her Master’s degree in Development Economics from Universitas Gadjah Mada (UGM), Indonesia, and her Bachelor’s degree from Politeknik Statistika STIS, Indonesia. Her research interests lie in the areas of development economics, sustainable economy, financial economics, input-output modelling, and regional macroeconomics. She has successfully published several articles in national and international journals.

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