The Role of Green Economy and Digital Transformation in Advancing Eco-Consumption and Sustainable Growth: Evidence from Indonesia

Abstract

This study investigates the dynamic interrelationship between the green economy, digital transformation, eco-consumption, and sustainable growth in Indonesia using the Vector Auto Regression (VAR) model. As Indonesia advances its commitment to sustainable development, understanding how green policies and digital infrastructure shape environmentally conscious consumption and long-term economic stability becomes essential. The analysis utilizes time-series data from national and international sources, covering indicators such as green credit, ICT exports, digital penetration, and GDP growth. The findings reveal a significant positive impact of digital transformation and green economy initiatives on both eco-consumption patterns and sustainable growth. Impulse response functions show that shocks to digital infrastructure and green finance propagate over time, influencing eco-conscious behavior and macroeconomic resilience. These results underscore the importance of integrating digital and green strategies to foster an inclusive and sustainable development path. Policy implications highlight the need for synergistic digital-green investments and regulatory support to maximize sustainability outcomes.