Green Industrial Downstreaming, ESG Governance, and Regional Economic Resilience: A Comparative Analysis of Indonesia’s Nickel Industrialization and Thailand’s Bio-Circular-Green Economic Model

Abstract

This article examines how institutional governance structures shape sustainable industrial transformation, regional competitiveness, and socio-economic resilience through a comparative analysis of Indonesia’s nickel downstreaming strategy and Thailand’s Bio-Circular-Green (BCG) economic model. The study argues that industrial transformation in emerging economies is determined not solely by resource endowment or technological upgrading, but by the interaction between institutional coordination, ESG-oriented governance, innovation ecosystems, industrial policy coherence, and sustainability integration. Drawing upon institutional economics, comparative business systems theory, and sustainability-transition frameworks, the article investigates how state capacity, industrial governance, green investment coordination, and technological adaptation influence economic performance and long-term developmental resilience. Using comparative institutional-economic analysis supported by data from BPS Statistics Indonesia, Bank Indonesia, OECD, IMF, ASEAN datasets, World Bank reports, ESG governance indicators, and industrial competitiveness statistics, the findings reveal significant institutional divergence between Indonesia and Thailand. Indonesia demonstrates strong industrial expansion through mineral downstreaming, export restructuring, and investment inflows linked to nickel-based electric vehicle ecosystems, yet faces governance fragmentation, environmental pressures, and uneven regional development. Thailand exhibits more integrated sustainability-oriented governance through the BCG framework, enabling stronger green-industrial coordination and innovation alignment, although industrial dependency on external demand and technological concentration remain structural vulnerabilities. This article contributes to the literature by integrating industrial downstreaming, ESG governance, and comparative business systems analysis within the Southeast Asian context. The study proposes a conceptual model linking institutional coherence, sustainability governance, industrial adaptability, and economic resilience. The findings indicate that sustainable industrial transformation requires coordinated governance systems capable of integrating industrial upgrading, environmental sustainability, social inclusion, and innovation-driven competitiveness within emerging-market economies.