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Contact Name
Yuli Andriansyah
Contact Email
yuliandriansyah@uii.ac.id
Phone
+6285369607374
Journal Mail Official
jurnal.lariba@uii.ac.id
Editorial Address
Gedung K.H. A. Wahid Hasyim, Kampus Terpadu UII, Jl. Kaliurang KM 14,5, Besi, Sleman, DI Yogyakarta, 55584
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Kab. sleman,
Daerah istimewa yogyakarta
INDONESIA
Journal of Islamic Economics Lariba
ISSN : 24774839     EISSN : 25283758     DOI : https://doi.org/10.20885/jielariba
Journal of Islamic Economics Lariba provides a platform for academicians, researchers, lecturers, students, and others having concerns about Islamic economics, finance, and development. The journal welcomes contributions on the following topics: Islamic economics, Islamic public finance, Islamic finance, Islamic accounting, Islamic business ethics, Islamic banking, Islamic insurance, Islamic human resource management, Islamic microfinance, Islamic capital market, and other relevant Islamic economic and financial studies.
Articles 251 Documents
The Role of economic education in optimizing local resource potential to increase community income‎ Mansyur, Fakhruddin; Hasanuddin, Hasanuddin; Abdul Malik; Fitrayani, Fitrayani
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art10

Abstract

IntroductionEconomic education plays a crucial role in empowering communities to recognize and manage the potential of local resources. In the of increasing global competitiveness, local resources are often overlooked, though they possess strategic value for community-based development. When aligned with Sharia entrepreneurial principles, the optimization of local resources can contribute not only to income growth but also to ethical and sustainable economic practices.ObjectivesThis study aims to explore the role of economic education in promoting Sharia-based entrepreneurship for optimizing local resource potential. Specifically, it investigates how economic education affects economic literacy and business diversification, and how it contributes to increasing community income.MethodThe research employed a mixed-methods approach, combining quantitative and qualitative data to provide a comprehensive analysis. Quantitative data were collected via a structured survey involving 300 respondents, while qualitative insights were obtained through in-depth interviews with 15 selected participants. Artificial Intelligence (AI) tools were used to assist in refining and analyzing the content for clarity and coherence.ResultsThe findings reveal that economic education significantly enhances economic literacy, as shown by an increase in literacy scores from 3.1 to 4.3. Moreover, 40% of respondents diversified their businesses after participating in the training—primarily into value-added agricultural products and tourism services. Interview data also highlight a shift in mindset, with communities beginning to focus on the development and management of local resources rather than merely utilizing them in traditional ways.ImplicationsThe study underscores the importance of practice-based economic education programs that incorporate technology and uphold Sharia principles. Effective collaboration among government institutions, private sectors, and educational bodies is essential to support infrastructure and funding for sustainable impact.Originality/NoveltyThis study uniquely combines the perspectives of economic education and Sharia entrepreneurship in the context of local resource optimization, an approach that has rarely been addressed in previous empirical studies. It also integrates AI-assisted analysis for enhanced validity and relevance in community development frameworks.
Transformation of the halal food industry in Bali Province: Evaluation of the effectiveness of halal labeling systems on local economic growth‎ Hidayati, Amalia Nuril; Syaichoni, Ahmad
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art11

Abstract

IntroductionHalal tourism has become a strategic priority in Indonesia, positioning the country as a global leader in the halal economy. Bali, a Hindu-majority region with unique cultural identity, faces the dual challenge of accommodating rising demand for halal-certified products from Muslim tourists while preserving local traditions. The effectiveness of halal labeling in this context is not only a matter of consumer assurance but also of industry transformation and economic development.ObjectivesThis study aims to analyze the effectiveness of the halal labeling system in driving the transformation of the halal food industry in Bali. It examines the role of halal labeling in product innovation, process improvement, marketing expansion, and institutional strengthening, and assesses its broader contribution to regional economic growth.MethodThe research uses a qualitative document analysis approach, synthesizing laws, policy frameworks, certification data, statistical records, and comparative international experiences. The analysis applies an endogenous growth perspective to evaluate how halal labeling functions as a catalyst for innovation, industry upgrading, and competitiveness in Bali’s halal food sector.ResultsThe findings reveal that halal labeling encourages significant transformation. Products are reformulated to meet halal requirements without diminishing cultural authenticity. Processes are upgraded through assurance systems, training, and quality management. Marketing strategies expand into Muslim-friendly branding and digital promotion, increasing access to international markets. Institutions are strengthened through the establishment of halal centers and multi-stakeholder collaboration. Data indicate that the number of halal-certified businesses in Bali increased nearly twentyfold between 2020 and 2024, though only about ten percent of micro, small, and medium enterprises are certified. The contribution of Muslim tourists to Bali’s tourism revenue also grew substantially during this period.ImplicationsThe study demonstrates that halal labeling operates as an effective instrument of structural change in a non-Muslim context when implemented with cultural sensitivity, institutional support, and facilitation for small enterprises. By fostering product upgrading, market diversification, and tourism competitiveness, halal labeling contributes to Bali’s economic recovery and sustainable growth.Originality/NoveltyThis study extends the discourse on halal labeling by reframing it from a narrow assurance mechanism into a driver of structural transformation. It integrates Islamic ethical foundations, international comparative experiences, and endogenous growth theory to propose a context-sensitive model for implementing halal labeling in minority-Muslim destinations.
Firm fundamentals and sectoral heterogeneity in Sharia-compliant stock return volatility: Evidence from Indonesia‎ Fithriyana, Rinda; Irfan, Andi; Sudirman, Wahyu Febri Ramadhan
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art12

Abstract

IntroductionThe volatility of stock returns in Islamic equity markets is a critical concern for both investors and policymakers. Islamic screening principles restrict excessive leverage and speculative activities, potentially shaping volatility in distinct ways compared to conventional markets. Understanding how firm fundamentals affect volatility within the Indonesia Sharia Stock Index is essential for evaluating the stability and competitiveness of Islamic capital markets.ObjectivesThis study aims to examine whether firm fundamentals, i.e. profitability, liquidity, leverage, size, growth, and asset turnover, systematically influence stock return volatility in Sharia‐compliant firms. It also seeks to identify cross‐sector heterogeneity in these relationships, highlighting whether specific industries are more sensitive to fundamental determinants of volatility.MethodThe research employs a quantitative design using a panel of 200 nonfinancial firms listed in the Indonesia Sharia Stock Index over the 2019–2023 period. Approximately 4,000 firm–quarter observations were analyzed. Volatility was modeled through panel generalized autoregressive conditional heteroskedasticity estimation, while Chow, Wald, and likelihood ratio tests were applied to assess sectoral heterogeneity. The study incorporated firm fundamentals as independent variables with sector‐specific models to capture industry differences.ResultsThe findings reveal that profitability and liquidity significantly reduce stock return volatility, while leverage consistently increases it. Firm size emerges as the most powerful stabilizer, growth contributes to higher volatility, and asset turnover lowers volatility. The magnitude of these effects varies across industries: Energy and Basic Materials show the strongest sensitivity to fundamental shocks, while Utilities and Healthcare display weaker responses. Statistical tests confirm substantial cross‐sector heterogeneity in the relationship between fundamentals and volatility.ImplicationsThe results demonstrate that Islamic screening principles, particularly restrictions on leverage, effectively mitigate excessive risk in Sharia markets. The study reinforces the relevance of Modern Portfolio Theory and Arbitrage Pricing Theory in Islamic settings while emphasizing the need for sector‐sensitive investment strategies. Portfolio managers and regulators may use these insights to refine risk management practices and enhance the resilience of Islamic equity markets.Originality/NoveltyThis study offers a novel application of panel GARCH modeling to explore cross‐sectoral heterogeneity in an Islamic equity universe. It contributes empirical evidence that firm fundamentals significantly and differentially shape volatility across industries, thereby advancing both Islamic finance scholarship and practical portfolio construction in Sharia‐compliant markets.
Why do bank risks affect stock returns? Examining the mediating role of profitability in Indonesia’s tier-1 banks‎ Gunawan, Indri; Soma , Abdul Mukti
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art7

Abstract

IntroductionSmall-scale Indonesian banks face intense challenges following the implementation of the ASEAN Economic Community and domestic capital requirements. While profitability is shaped by credit risk, operational efficiency, and capital adequacy, the translation of these internal factors into stock returns remains uncertain. Islamic banks, with their unique risk-sharing principles, offer a distinct context for evaluating this relationship.ObjectivesThis study investigates whether credit risk, operational efficiency, capital adequacy, and net interest margins influence stock returns in small Indonesian banks, and whether profitability, measured by return on assets, mediates this relationship within the framework of Islamic banking principles.MethodThe research applies a quantitative panel analysis of 15 listed small-scale Indonesian banks from 2014 to 2022. Financial and market data were drawn from official regulatory and market reports. Feasible generalized least squares with panel-corrected standard errors, alongside trimming and winsorization techniques, were employed to address heteroskedasticity, autocorrelation, and outliers.ResultsThe findings demonstrate that credit risk and operational inefficiency reduce profitability, while net interest margins increase it. Capital adequacy shows no significant impact on profitability. However, none of these factors, including profitability itself, significantly explain stock returns, which appear dominated by external drivers such as macroeconomic variables and investor sentiment. Profitability does not mediate the relationship between risk factors and stock performance.ImplicationsThe results highlight a disconnection between internal performance measures and market outcomes in small Islamic banks. For theory, the study challenges conventional risk-return models by emphasizing institutional and behavioral factors. For practice and policy, the findings underline the need for improved risk management, operational efficiency, transparency, and investor education to strengthen the link between profitability and shareholder value.Originality/NoveltyThis study contributes to the literature by integrating risk-return analysis with the specific context of Islamic banking. It shows how profitability drivers in small banks do not automatically translate into equity market performance, underscoring the importance of governance, Shariah compliance, and investor sentiment in shaping financial sustainability.
The dynamics of mosque fund management in Old Order Indonesia Fahmi, Rizqi Anfanni; Fauzia, Amelia; Razzaq, Abdur
Journal of Islamic Economics Lariba Vol. 12 No. 1 (2026)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol12.iss1.art4

Abstract

Introduction The management of mosque funds in Indonesia during the Old Order period (1945-1965) played a vital role in religious and social life. Mosques became central to national identity and cohesion, supported by Ad Hoc committees. This study examines the balance between state control and local autonomy in mosque fund management.ObjectivesThis study investigates the dynamics of mosque fund management in the Old Order period, focusing on the roles of Ad Hoc committees and the Ministry of Religious Affairs. It aims to explore how state intervention and Islamic charitable practices like zakat and waqf influenced mosque sustainability and governance.MethodA historical methodology is used, involving four stages: heuristics (source identification), verification (source cross-checking), interpretation (data analysis), and historiography (situating the study in literature). Primary and secondary sources, including government records and newspapers, are analyzed to understand mosque fund management during Indonesia's early independence period.ResultsFindings reveal a balance between local autonomy and centralized state control in mosque fund management. Ad Hoc committees fostered community involvement, while the Ministry of Religious Affairs centralized governance, affecting local autonomy. Islamic charitable practices, particularly zakat and waqf, were crucial for mosque sustainability but faced governance challenges.ImplicationsThis study highlights the need for balancing government regulation with local community participation in mosque management. It also emphasizes the significance of Islamic charitable practices, suggesting that integrating local needs with state oversight can lead to more sustainable and transparent religious institution management.Originality/NoveltyThis research contributes new insights by examining mosque fund management during Indonesia's Old Order period, focusing on the interaction between local governance and state control. It offers a unique historical perspective on the challenges and successes of mosque management, enriching the understanding of post-colonial religious governance.
Analyzing digital resilience strategies for Harian Waspada through ANP and Maqashid Shariah in a VUCA environment Arsyadona, Arsyadona; Rokan, Mustapa Khamal; Rahmani, Nur Ahmadi Bi
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art18

Abstract

IntroductionPrint media organizations in Indonesia face mounting pressure as digital technology reshapes audience behavior, advertising markets, and competition. Harian Waspada, a long-standing Sharia-based newspaper, must navigate an environment defined by volatility, uncertainty, complexity, and ambiguity while preserving its ethical foundation. The organization confronts declining print revenue, limited digital capability, and evolving expectations for interactive and diverse content. These challenges call for a comprehensive assessment of how financial, technological, organizational, and ethical dimensions shape long-term resilience.ObjectivesThis study aims to identify the most critical factors that influence the resilience of Harian Waspada in the digital era and to determine strategic priorities that support sustainable transformation. It also seeks to explore how principles of Maqashid Shariah can guide responsible decision-making and strengthen adaptability in a rapidly changing media landscape.MethodThe study employed a mixed-methods approach. Qualitative insights were collected through interviews with individuals who understand the newspaper’s operations and the broader media industry. Quantitative analysis was conducted using the Analytic Network Process to examine the relationships among financial sustainability, digital readiness, organizational culture, audience engagement, and ethical considerations. The analysis produced priority rankings and illustrated the interdependence among these factors.ResultsThe findings show that financial sustainability and digitalization challenges present the greatest obstacles to organizational resilience. A substantial decline in advertising revenue, combined with limited technological infrastructure and digital skills, restricts the pace of transformation. The study also reveals that audience engagement, content diversification, and stronger internal coordination are essential for long-term survival. Strategic priorities include investment in digital technology, enhancement of human resources, development of interactive communication channels, and content innovation. Ethical guidance derived from Maqashid Shariah supports the creation of responsible journalism and strengthens trust with readers.ImplicationsThe results indicate that successful adaptation requires a holistic approach that aligns technological advancement, financial management, organizational transformation, and ethical values. Strengthening the connection between strategic planning and Maqashid Shariah encourages balanced growth and reinforces the social role of the media.Originality/NoveltyThis study offers an integrative perspective by combining the Analytic Network Process with Maqashid Shariah to evaluate media resilience. It provides a structured framework that connects digital transformation, financial stability, organizational renewal, and ethical governance in an Islamic media context.
Determinants of food producers’ intentions to obtain halal certification: An integrated TPB–halal model in Bali, Indonesia Niswa, Harisatun; Diana, Ilfi Nur; Yuliana, Indah
Journal of Islamic Economics Lariba Vol. 12 No. 1 (2026)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol12.iss1.art5

Abstract

IntroductionHalal certification has become increasingly important for food producers operating in non-Muslim-majority destinations such as Bali, where Muslim tourism continues to expand. Although numerous studies investigate halal consumption behavior, research examining producers’ intentions to obtain halal certification remains limited. This study extends existing knowledge by integrating halal knowledge and halal awareness into the Theory of Planned Behavior to explain certification intentions among food-sector entrepreneurs.ObjectivesThe study aims to identify and analyze the determinants influencing food producers’ intentions to obtain halal certification in Bali by assessing the roles of attitude, subjective norms, perceived behavioral control, halal knowledge, and halal awareness within an integrated behavioral framework.MethodA quantitative research design was employed, involving 150 food producers selected using non-probability sampling. Data were collected through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling. Measurement and structural models were assessed to evaluate validity, reliability, and the significance of hypothesized relationships.ResultsThe findings show that all five determinants—attitude, subjective norms, perceived behavioral control, halal knowledge, and halal awareness—positively and significantly affect producers’ intentions to obtain halal certification. The model explains 85.9 percent of the variance in intention, demonstrating strong predictive power. The results highlight the combined influence of cognitive, social, and religious factors in shaping certification decisions.ImplicationsThe study provides theoretical contributions by expanding the Theory of Planned Behavior with halal-specific constructs and offers practical insights for policymakers, certification bodies, and industry stakeholders in promoting halal certification through education, technical assistance, and supportive regulatory frameworks.Originality/NoveltyThis research provides a comprehensive behavioral model for understanding halal certification intentions in a minority-Muslim tourism context, offering new insights into how halal knowledge and awareness strengthen producers’ decisions to pursue formal certification.
Mapping Islamic banking and sustainable development research: A Scopus-based bibliometric and VOSviewer keyword co-occurrence cluster analysis (2008–2024) Garbo, Anom; Hasanah, Shofia Mauizotun
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art24

Abstract

IntroductionSustainable development has become a central paradigm in contemporary finance, shaping how banking institutions align capital allocation, governance, and social value creation with long-term development goals. Within this context, Islamic banking is increasingly examined as a values-driven system that may support sustainable development through ethical foundations, Sharia compliance, and inclusion-oriented financial practices. However, the expanding literature remains fragmented across themes, methods, and policy debates, creating a need for systematic mapping of its intellectual structure and research frontiers.ObjectivesThis study aims to (1) map the evolution and distribution of research on Islamic banking and sustainable development, (2) identify dominant and emerging thematic clusters through keyword co-occurrence, and (3) highlight research gaps and future directions that can inform theory development, banking practice, and sustainability-oriented policy.MethodThis study employs a bibliometric approach using Scopus metadata retrieved through the query (TITLE-ABS-KEY ( islamic AND bank ) AND TITLE-ABS-KEY ("sustainable development")) AND PUBYEAR > 2007 AND PUBYEAR < 2025, producing 120 documents. Keyword co-occurrence cluster analysis was conducted in VOSviewer with the following settings: type of analysis co-occurrence, unit of analysis all keywords, and minimum keyword occurrence of two. Of 602 keywords, 95 met the threshold. The thematic structure was interpreted using network visualization, overlay visualization, and density visualization.ResultsThe findings show that “sustainable development” functions as the most central and highly connected concept, indicating its role as the primary thematic anchor of the literature. The network structure reveals multiple interconnected streams, including (1) corporate social responsibility, Sharia-aligned environmental, social, and governance, governance mechanisms, and bank performance; (2) sustainable development goals, poverty, financial inclusion, and Islamic social finance; and (3) methodological diversification combining econometric modeling and qualitative inquiry. Overlay patterns suggest a shift from earlier governance and performance-focused studies toward more recent emphasis on sustainable development goals, inclusion, and innovation.ImplicationsThe study provides evidence that sustainability in Islamic banking research is increasingly institutionalized through governance and reporting pathways while expanding toward inclusion-driven development agendas. These insights support more coherent research agendas, improved sustainability governance practices, and policy frameworks that strengthen Sharia-aligned environmental, social, and governance integration and social finance effectiveness.Originality/NoveltyThis study offers a systematic, data-driven synthesis of the Islamic banking–sustainable development research domain by integrating bibliometric indicators with keyword co-occurrence clustering and multi-layer visualization, enabling clearer identification of thematic concentration, emerging priorities, and underexplored research frontiers.
Understanding intentions to donate to Islamic charities online: A systematic review of theories, methods, and determinants Rakhmawati, Rakhmawati
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art25

Abstract

IntroductionThe rapid development of digital technology has transformed Islamic philanthropic practices by enabling zakat, waqf, infaq, and sadaqah to be delivered through online platforms, mobile applications, and financial technology systems. This transformation has expanded access and efficiency while introducing new behavioral, technological, and institutional dynamics that shape how Muslims engage in charitable giving. As online Islamic donations increasingly contribute to broader agendas of Islamic social finance and sustainable development, understanding the determinants of donors’ intentions in digital environments has become an important area of scholarly inquiry. However, existing studies remain fragmented, vary in theoretical and methodological approaches, and lack an integrated synthesis focused specifically on Islamic online donation intentions.ObjectivesThis study aims to systematically review and synthesize the academic literature on intentions to donate to Islamic charities through online channels. It seeks to map the current state of research, identify dominant themes and theoretical frameworks, examine methodological trends, highlight key determinants of donation intention, and reveal gaps related to underexplored factors, contexts, and populations.MethodThe study employs a systematic literature review using a structured and transparent approach based on the PSALSAR framework. Peer-reviewed journal articles were identified through comprehensive searches of Scopus and Web of Science databases using predefined keywords related to intention, online contexts, and Islamic donation instruments. A rigorous screening and appraisal process resulted in a final sample of 23 eligible studies, which were analyzed and synthesized to extract patterns in theories, methods, variables, and empirical findings.ResultsThe review shows that research on Islamic online donation intention is dominated by quantitative studies using Structural Equation Modeling and Partial Least Squares Structural Equation Modeling. The Unified Theory of Acceptance and Use of Technology, the Technology Acceptance Model, and the Theory of Planned Behavior are the most frequently applied frameworks. Trust, religiosity, and technology acceptance consistently emerge as central determinants of online Islamic donation intention, particularly in studies on zakat and cash waqf. The literature also reveals a strong geographic concentration in a limited number of countries.ImplicationsThe findings underscore the importance of trust-building, religious motivation, and user-friendly digital systems for enhancing online Islamic donations. They also point to the need for broader theoretical perspectives, diversified methods, and expanded geographic coverage.Originality/NoveltyThis study contributes by offering a focused and comprehensive synthesis of research on Islamic online donation intentions, strengthening cumulative knowledge and providing a clear agenda for future research in digital Islamic philanthropy.
Artificial Intelligence adoption in micro, small, and medium enterprises: Evidence, barriers, and Islamic ethical reflections for Muslim entrepreneurs in Yogyakarta Hamid, Edy Suandi; Artha, Bhenu
Journal of Islamic Economics Lariba Vol. 11 No. 2 (2025)
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jielariba.vol11.iss2.art26

Abstract

IntroductionArtificial intelligence is increasingly recognized as a strategic driver of competitiveness and innovation in micro, small, and medium enterprises. Yet the benefits of artificial intelligence adoption are uneven across contexts and often depend on organizational readiness, infrastructure, and ethical governance. This issue is particularly relevant for micro, small, and medium enterprises in Yogyakarta, Indonesia, where many businesses operate with limited digital capability and constrained access to capital. For Muslim entrepreneurs, adoption decisions are further shaped by Islamic business ethics that emphasize trust, transparency, fairness, halal integrity, and social responsibility.ObjectivesThis study examines the importance of artificial intelligence adoption for micro, small, and medium enterprises by synthesizing global evidence and developing a context-sensitive reflection for Muslim entrepreneurs in Yogyakarta, Indonesia. It aims to clarify key benefits, identify persistent barriers, and propose an ethically grounded rationale for responsible adoption.MethodThis study uses an argumentative review approach to analyze peer-reviewed literature on artificial intelligence adoption in micro, small, and medium enterprises. The synthesis is organized into five analytical themes: (1) global evidence on performance impacts, (2) drivers and barriers of adoption, (3) characteristics of micro, small, and medium enterprises in Indonesia and Yogyakarta, (4) opportunities and constraints for implementation in Yogyakarta, and (5) ethical reflections based on Islamic business ethics.ResultsThe review indicates that artificial intelligence adoption can improve productivity, cost efficiency, and decision-making quality in micro, small, and medium enterprises, while also supporting innovation and market competitiveness when integrated with complementary digital capabilities. However, adoption is frequently constrained by limited financial resources, skills gaps, inadequate infrastructure, weak data governance, and uncertainty about return on investment. In Yogyakarta, these constraints are reinforced by informal business structures and uneven digital readiness, suggesting that adoption pathways must be incremental, affordable, and supported by capability development.ImplicationsThis study highlights that artificial intelligence adoption for micro, small, and medium enterprises in Yogyakarta should be approached as a socio-technical and ethical decision, not merely a technical investment. Practical implications include the need for targeted training, affordable artificial intelligence services, and governance practices that strengthen consumer trust.Originality/NoveltyThis study contributes a contextual and ethically grounded synthesis by linking global artificial intelligence adoption evidence with the realities of micro, small, and medium enterprises in Yogyakarta and the normative considerations of Muslim entrepreneurship in Indonesia.