P056 Green Economic Rationality in Price Setting Among Sharia Compliant MSME in Indonesia

Abstract

The global sustainability agenda has renewed scholarly interest in how economic rationality is defined and practiced, yet this discourse remains concentrated at the macro level of green sharia finance instruments such as green sukuk and Islamic green banking. Comparatively little attention has been paid to how sustainability values are internalized in the pricing decisions of micro-scale, sharia-compliant producers. This study addresses that gap by examining how green economic rationality manifests in the price-setting behavior of Muslim-owned micro, small, and medium enterprises (MSMEs) in Indonesia. Employing a qualitative case study design, data are drawn from in-depth interviews and field observation with sharia-compliant MSME producers across the food, craft, and fashion sectors, analyzed using the Miles, Huberman, and Saldaña interactive coding model. The study is grounded in the maqasid al-shariah and maslahah frameworks, positioning environmental responsibility as an extension of, rather than a departure from, Islamic socio-economic rationality in pricing. Anticipated findings include the identification of context-dependent patterns linking material sourcing choices, communal reciprocity, and price formation among producers who frame environmental consideration through religiously grounded notions of benefit and harm avoidance. The study is expected to contribute a micro-level, behaviorally grounded account of green economic rationality that complements the predominantly macro-financial literature on Islamic sustainability, while offering practical implications for MSME policy design and sharia financial institutions seeking to support environmentally responsible producer practices.