<![CDATA[Purpose – This study examines the transformation of pesantren from Islamic educational institutions into community empowerment agents within the Islamic economic ecosystem. It explores strategies for economic self-sufficiency, empowerment mechanisms, and key implementation challenges. Design/methodology/approach – This study develops a conceptual framework through a literature-based approach, combining systematic literature review elements with secondary quantitative data. A total of 122 documents published between 2020 and 2026 were synthesized, alongside secondary data from Kemenag RI, P3M, LIPI, BPS, and OJK. Findings – The findings indicate that only 28% of pesantren operate independent business units, while 72% remain dependent on donations. Major challenges include limited access to shariah financing, business legality gaps, and low digital literacy. The analysis also identifies a digitalization paradox, where digital adoption is strongly associated with higher income despite its relatively low implementation across pesantren. Originality/Value – This study contributes by conceptualizing pesantren as theologically embedded hybrid organizations and proposing a conceptual framework for the Pesantren Economic Independence Index (PEII). It further introduces the concepts of virtuous institutional recursion and the legitimacy–efficiency paradox, providing a foundation for future empirical research on Islamic educational institutions and community economic empowerment.]]>
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