Macroeconomic and Institutional Determinants of Halal Industry Growth: Evidence From OIC Countries
DOI:
https://doi.org/10.54045/jeksyah.v6i02.3750Keywords:
Halal Industry, Government Effectiveness, Inflation, Population Growth, Exchange rateAbstract
The growing global demand for halal products and services has increased the significance of the halal industry. However, OIC member states still face challenges in maximizing the halal industry's potential, particularly related to macroeconomic conditions and governance quality. This study analyzes the factors influencing halal industry growth in OIC member states, including population growth, inflation, exchange rates, foreign direct investment (FDI), and government effectiveness. The analysis relies a quantitative approach, utilizing secondary data from World Bank and State of Global Islamic Economy (SGIE) Report. The analysis utilizes panel data from 10 OIC member countries for the period from 2015 to 2024. The research finds that exchange rates and government effectiveness have a positively influence on the halal industry growth. Furthermore, inflation and population growth have a negative effect, while Foreign Direct Investment has no significant determinant on the halal industry growth. The empirical evidence from this study show policymakers that the growth of the halal industry depends not only on market potential and investment but also on macroeconomic stability and the quality of governance; therefore, strengthening both is crucial to supporting the industry's growth.
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