The Impact of Green Finance on Sustainable Economic Growth in Developing Countries: An Empirical Study in Indonesia

Abstrak

The transformation towards a sustainable economy demands a financial system that is not solely profit-oriented but also considers environmental sustainability. This study aims to analyze the influence of green finance on sustainable economic growth in Indonesia, a representative developing country with high potential for green investment. The research method uses a quantitative approach with panel data regression analysis (2010–2024), involving key variables such as the amount of green loans, green bond issuance, and renewable energy investment as independent variables. Sustainable economic growth is measured using Green GDP and the Sustainable Development Index. The results are expected to demonstrate that increasing green finance has a positive and significant impact on sustainable economic growth, both directly and through increased energy productivity and carbon efficiency. These findings provide important implications for policymakers, financial institutions, and industry players to strengthen the role of green finance as a key driver of low-carbon development in Indonesia.