Agricultural Infrastructure and Green Economic Growth in Indonesia

Abstract

Indonesia’s development agenda toward 2045 prioritizes the transition toward a low-carbon economy, yet agri-food systems still face logistics inefficiencies, resource constraints, and climate vulnerability. This study examines whether Enabling Infrastructure Capacity (EIC) and Agricultural Production Support Capacity (APSC) contribute to green economic performance and whether Socioeconomic Performance (SEP) mediates these relationships. A quantitative multi-method approach is applied by combining Partial Least Squares Structural Equation Modeling (PLS-SEM) and fixed-effects panel regression. The study uses secondary data from 33 Indonesian provinces over the 2011–2020 period. The PLS-SEM model evaluates structural relationships among EIC, APSC, SEP, and the Green Economy Index (GEI), while the panel regression assesses the association between observed infrastructure-service indicators and Gross Regional Domestic Product (GRDP). The results show that EIC and APSC have positive and significant direct relationships with GEI and SEP. However, SEP does not significantly mediate the relationships between EIC/APSC and GEI. The panel results show that access to safe drinking water is positively associated with GRDP, while electricity access, road length, and irrigation rehabilitation are not significant. These findings emphasize the importance of infrastructure service quality, agricultural production-support capacity, and green-oriented policy instruments.