ESG-based Public Financial Management and Sustainable Regional Development: An Islamic Economic Perspective
DOI:
https://doi.org/10.26740/al-uqud.v10n1.p125-160Keywords:
ESG-Based Public Financial Management, Social SDGs Achievement, Sustainable Regional Development, Fiscal CapacityAbstract
This study examines the relationship between ESG-Based Public Financial Management (ESG-PFM) and Sustainable Regional Development (SRD), with Social SDGs Achievement (SSA) as a mediator and Regional Fiscal Capacity Level (RFCL) as a moderator. Using a quantitative explanatory approach, the study analyzes 340 observations from 34 Indonesian provinces (2015–2024). Composite indices are constructed using Principal Component Analysis (PCA), followed by panel data regression and Partial Least Squares Structural Equation Modeling (PLS-SEM) for robustness assessment. The findings reveal significant relationships among ESG-PFM, SSA, and SRD, with SSA serving as a mediating mechanism and RFCL significantly moderating the SSA–SRD relationship. Theoretically, this study contributes to Islamic public finance by integrating amanah (responsible stewardship), maslahah (public welfare), and maqasid al-Shariah into sustainability-oriented fiscal governance. It advances a value-based perspective linking fiscal accountability, ethical resource allocation, distributive justice, and sustainable public welfare.
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